Instituto Tecnológico Vale

The Vale Technology Institute & the future of mining

In 2007 mining major Vale began talking about something rather different; the Vale Technology Institute (“Instituto Tecnológico Vale” or “ITV”). Talk centred on two main agendas: the first, to safeguard global mineral sourcing for the future (and in doing so position Vale’s future dealings advantageously). The second, to make responsible and respectful approaches to environmental, scientific and technological development a matter of course. By 2009 the time for talking ran out and ITV sprang into action. Taking on such a mammoth task presented the company with a lot of hurdles—not least a cold hard look at how healthy its future looks to be—and where, whom and how the globe is currently lacking if we are all going to get on board and work for future progress in the field. Speaking exclusively to CBJ following the company’s workshop in Belém, mid-May, where the first of ITV’s research centres is being launched, director Luiz Mello talked about the group’s approach, success and the challenges up ahead.

As Mello explains, the average lifespan for companies largely reflects how investors will approach the market. In 1935 the life expectancy average for an S&P500 company was 90 years. By 1970 that total dwindled to 35 years, and by 2000 it hit 15 years. It’s a downward trend, without doubt, but it is nonetheless impressive and Mello says Vale is acutely aware “that companies come and go.”

“Often this isn’t because of bad management, but rather because of technology changes. Even for extractive industries technology changes can play a big role in how companies succeed and continue doing business. For the mineral resources industry, the main concern is with regard to environmental aspects, and to that end it is clear for Vale that different nations and the global community will realise the importance of sustainability and environmental concerns. Within that, they will also better understand the restrictions, for example on what amounts of CO2 you can emit for a unit or measure of activity, and how that will be defined; concerns like the limits on how much water you may consume, or reuse, in activity such as per tonne of iron ore produced—that will be the standards against which companies will be measured. They will not only be considered for how green they are, but perhaps also allowed to keep functioning.”

These are thoughts that rest heavily with any responsibly-operating vehicle in the resources industry and true to its role as a leading light, through ITV, Vale has taken its awareness to the next level by partnering with academic institutions and organizations performing science and technology-related research all over the world. In seeking to do this effectively, the group came across the concept of building an institute of technology.

“Not only a hub connecting different institutions around the world, but also a place enabling us to be a producer of the technologies that will enable us to be more effective at what we do and to continue not only following standards, but contributing to their definition. We don’t want a passive role [in bettering scientific and technological progress] and we will be active to that end.”

It centres on an ethos which many businesses aspire too (or even assume in their outward identity) but few really take the reins and master: open innovation.

As Mello says, a lot of people like to do a lot of talking about it, but the fact is most industries have a long way to go before making ground. Vale on the other hand, has applied the concept and embraced the difficulties it presents, in the form of this wholly-dedicated organization.

“One of the main concepts underlying open innovation ought to be drawn [attention to]. Vale is a very large mining company—the most profitable in recent months—and it has all of the resources to do what it needs to in science and technology. If we were to hire 1,000 top researchers to conduct activity at our institutes, how many others would be left outside that number? I’m sure there are thousands more in different realms of science and technology, and by definition it’s impossible for any single company to have all of the expertise available, let alone the fact that it wouldn’t be cost effective for a company to hire that many researchers. Should a company hire a good number (in our case around 150-200) then with those staff do its own research and also tap into available knowledge outside its historic boundaries? That’s what open innovation is really about.”

The ITV organization comprises of three particular areas of activity; research, teaching and entrepreneurship. While at face value this may seem simple enough, further investigation proves otherwise. Beginning with commitments in entrepreneurship, Mello explains, Vale’s native Brazil proves to be a good example of the intricacies attached to work in this field, depending on where the work takes place and the resources (people and planet) available. In this instance, it has spurred the group on and into some promising working relationships.

“The areas where entrepreneurship is present in Brazil are not necessarily those where a company like Vale will benefit. It’s mostly in the cities and for tourism—people starting small enterprises like retail—and these don’t really benefit future business for Vale, if they do it tends to be rather indirectly, not to our core activities. Having people develop services and take on the role of service providers for Vale in any of our interests is part of our goals. We partner with MIT [Massachusetts Institute of Technology]; a remarkable institution in terms of its ability to develop new businesses outside of students and professors, and it’s become a hallmark for start-up companies and entrepreneurship. That really addresses that aspect [of our work] and we plan to have our first training program with MIT in the second semester. This will take place in Belém, where we have our largest operations, Carajás, in the Amazon area. Entrepreneurship is being addressed in that way, and that’s the most recent outcome of that initiative.”

However the training program is not the only classroom effort to be launched this coming semester. Under ITV’s teaching division two other important programs are set to commence formal teaching.

“One is another in partnership with MIT and another is with specialists from abroad. That one is aimed at addressing climatic changes. They will be part of the post-graduate program we’ll launch at our unit in Belém, the unit to do with sustainable development. Even though the post-graduate program has not been formally submitted to the federal agency in Brazil that regulates those sorts of programs, we are already able to propose short courses that later on will be considered as credit for the full program.”

Under its research arm, a partnership with the national institute of atmospheric research in Brazil indicates how much due attention is and will be paid to the area of climatic changes.

“That organization has been quite important for Brazil in defining the levels of deforestation taking place in the Amazon and other climatic changes we have in South America. In that partnership we’ll look at different models and simulate conditions that may affect our operations, maybe in Carajás, New Caledonia, Africa, Australia and beyond. A number of those studies have been conducted by others, but as with any research area a number of the topics might not have been covered by previous research. That is already underway.”

Pivotal to stocking each of its three divisions with the best brains the world has to offer, the Belém meet allowed ITV to present its aims and activities to the world, and the world to mull over what more needs to be done. Akin to a showcase demonstrating ability, requirement and opportunities for interested parties, the results from this first formal commitment to building the scientific research agenda and work with Belém’s research community have been very positive.

“We opened with a conference by Dr. Mohan Munasinghe; one of the leading experts on the IPCC [Intergovernmental Panel on Climate Change]. We followed that event with a meeting in Rio where specialists from all over the world discussed different scenarios for climatic change and also how the mining industry can consider its effects in terms of sustainable development; the most likely scenario, the worst scenario, the best. Based on those we looked at what the main topics should be for research teams and how we should work on developing them.

We were also able to expose a number of researchers from around the globe to the project. That prompted some of them to get interested in being part of it and we’re still discussing possibilities there. Some are Brazilian, some are foreigners, and this week we have a husband and wife team from Russia—who work in Europe—and they’re visiting our unit and looking at becoming staff of the institute. It was a good way to set the ball rolling, get people aware of the project and commence the hiring process with the right people. I think that people are key to any activity, and I’m most certain that the future of the institute will depend on how well we hire people and manage their work in regard to our aims. The outcomes of the workshops are interesting in that they contribute to future lines of research and defining the main themes, and also to our ability to hire and discuss possible people for the future.”

Since then, another workshop looking more closely at utilising solar and other clean/green energy sources has taken place, again with great results. ITV hosted some-40 researchers from all over the world in Rio, early June, including leading experts on photovoltaic solar, geothermal energy and biofuels.

“Even though our institute is dedicated mostly to renewable energy, we can’t forget that for each country–even in 2050—a main source of energy will still be fossil fuels. They will be oil or coal-derived, and Vale is mindful of this. We also have researchers from those areas, mostly concerning the efficient use of coal, clean coal technologies and cleaner sources of gas in place of oil, for example.”

Alongside generating interest from science and technology communities, ITV has inevitably bent the ear of its peers and other miners too. When asked about how ITV’s model really matches up to those of other majors, Mello remains open to all ideas under development, pointing out how great an impact Vale’s history—and that of its role in Brazil—has on plans in place.

“The way I see it is, of course, other mining companies depending on their global locations have different work underway, with different strategies, but looking at companies in Brazil there’s a clear first-mover in Petrobras. They developed a very large R&D centre, but still it’s predominantly business-oriented. Rather than looking at long-term prospects for things like biofuels, it tends to focus on the challenges the company faces now. I’m aware from other companies that have discussed our model with us, other companies are trying to look at us carefully. One interesting consideration is whether or not Brazil will leap frog some steps other nations have needed to pass through, or whether the country itself needs to take different steps along the way.”

While activity to date is largely on the ground in Brazil, it is important to be mindful of ITV’s intentions on a global scale. Whether its developing empirical projects, conversing with academics and like-minded vehicles, or attracting key people into the fold, it is clear that what has begun in Brazil is destined for the world.

“One fundamental aspect is that even though we’re establishing the first three centres in Brazil, it’s an international venture. Portuguese is not the main global language, and by definition the common language of science and technology is English. Everything we do in the units will be done with English as the main means of communication, and with that I also stress that we’ll have the most international spread possible. If we’re constrained by location limitations or language, we won’t develop our capabilities at the levels we want to. Also, this is about taking portions of everyone’s knowledge. We use the acronym BRIC, as Brazil together with Russian, India and China, and in many ways Brazil is a land of opportunity. If anyone reading this fits with the intentions of our institute, it could be an option for career development. Also in terms of new activities as well as our workshops, we’ll be opening our temporary facilities in Belém this second semester, and also in São José dos Campos then too. We expect to announce the first set of contracted researchers this second semester—members of the Brazilian Academy of Science and top global researchers. The best research activity from those people will demonstrate [the] ambitions we’re fostering and which directions we’re going in.”

CBJ thanks Murilo Fiuza and Luiz Mello of Vale for their time, insight and input in this article.