Mining for innovation: the R&D structures of steel companies at work

Metallurgy has evolved from a highly conservative industry to one of the most innovative and high-tech in the world. Here's an overview of how Russian companies' R&D efforts are structured and what they're working on.

A pivot to innovation

Metallurgy and mining have historically been considered conservative industries. The first decade of the 21st century saw a significant increase in profitability in this sector. Yet companies continued to cut back on R&D spending, continuing a trend dating back to the 1980s.

But the industry has faced new challenges, from increasing safety and efficiency requirements to the emerging trend towards ESG. As a result, its profile has changed.

International accountancy firm BDO estimates that in 2023, companies will care less about mining and processing metals and more about 'mining' innovation: metals companies will develop new processes and products, attract as much talent as possible and seek to maximise financial returns.

R&D structures play a key role in generating innovation. Their work covers two main areas: the exploration, analysis and initial testing of technologies (research) and the development of ready-made solutions (development). R&D is concerned with creating business value through the use of new technologies.

Alexander Vartomo, General Director of the Gipronickel Institute (Nornickel's R&D centre), says that supporting an existing facility or setting up and developing a new business in a remote area involves choosing an appropriate technology for mining, ore refining, metallurgical production, reducing environmental impact and developing the necessary infrastructure.

"Innovative solutions at each of these stages have an impact not only on the reliability and economic efficiency of individual companies, but also on the development of the industrial potential of entire regions," he noted.

Alena Starodubtseva, Director of the Polyus Gold Research Centre, said that the industry certainly needs innovation and more efficient technologies, given the lower content of the valuable component in ore and the higher refinement of raw materials. "We also need to adapt to the restrictions imposed by the sanctions," says Starodubtseva.

In the context of sanctions and restrictions, the role of innovation is growing in all sectors, adds Peter Mishnev, Director of Technical Development and Quality at Severstal. Flexible and imaginative solutions are necessary not only to maintain stability and business development, but also to meet the import substitution challenges faced by customers in a wide range of sectors.

The NLMK Group agrees that innovation is essential. In the new economic environment it has become even more important. According to the company's spokesperson, R&D is focused on increasing the efficiency of production technologies and, more broadly, on improving the business model and reducing the environmental impact of production facilities.

The development of steel companies today is influenced by several trends related to the use of new technologies and innovation.

The first is the transition to a new type of production, known as Industry 4.0. This involves large-scale robotics and digitalisation. Since 2005, for example, the number of patents in the field of automation and unmanned production in the mining industry has increased dramatically. Thanks to drones, autonomous trucks and remote control centres, companies are dramatically increasing their efficiency, according to international consultancy E&Y. Meanwhile, digital twins and improved modelling are helping companies achieve sustainable savings.

The second trend is the widespread use of AI. BDO expects artificial intelligence to become an everyday tool for industry leaders around the world by 2023. AI will help interpret and analyse data from smart sensors and machines, while improving worker safety.

The third is the creation and introduction of new materials and products, including those based on nanotechnology, materials with increased resistance to deformation and high temperatures, products with reduced costs and improved quality.

The fourth trend is concern for the environment. Zero-waste production technologies, reduced energy consumption and emissions are relevant to the mining industry. According to E&Y, ESG issues will be both a major opportunity and risk for the metals sector in 2023, as they will affect every aspect of a company's business. And they will focus on issues ranging from worker safety and emissions reduction to biodiversity and water management.

Ultimately, the trends are different in each country. In Canada, for example, as BDO points out, the focus is on alternative energy sources in the manufacturing process and attracting digital talent. For South Africa, it is the development of its own independent power plants to ensure uninterrupted production and the transition to renewable energy sources. And for the US, increasing production of metals for batteries while minimising the environmental impact of mining.

How Russian companies' R&D departments are structured and what they are working on

Nornickel

Nornickel's key R&D competencies are concentrated in the R&D department of the Gipronickel Institute. The scientific base has been formed over the Institute's almost 90-year history. It employs over 150 specialists with unique expertise in mining, metallurgy and processing. They include Ph.D. candidates, full members of the Russian Academy of Natural Sciences, the Academy of Mining Sciences, and promising groups of young scientists. The Institute has four technological and two testing laboratories.

What is the Institute working on?

• Producing cathode materials for lithium-ion batteries. In just one year, the Institute has managed to set up a team of researchers, develop the necessary skills and obtain the first samples of cathode materials with electrochemical characteristics close to those of commercial materials. In addition, the Institute's specialists have developed a technology for the production of high-purity nickel and cobalt sulphate, which is required for the manufacture of cathode materials. This will make it possible to produce saturated cathode materials from domestic raw materials.

• Developing and improving technologies for the extraction of precious metal concentrates, including the development of proprietary technologies for the extraction of refined platinum group metals, gold and silver.

• Conducting large-scale geotechnical studies for the Skalisty and Glubokaya mines, which operate at depths of up to 2 km. Increased mining pressure in such conditions can lead to geotechnical risks. To address these, specialists are drilling core holes, examining samples, developing stress-strain models and working out ore extraction scenarios. No similar studies have been carried out at this depth in Russia or Eurasia.

• Developing proprietary digital tools and dynamic modelling environments at various scales: from new technology development and production design to the development of 'digital twins' of the workshop and intelligent engineering process control systems. Transition to Russian analogues of Western software.

• Development of design documentation for high-capacity melting complexes of two cascaded Vanyukov furnaces with an intelligent control system. The new furnaces will help increase the Polar Division's output of marketable products and improve environmental conditions in the region. In the long term, the Russian development may completely replace the Finnish weighted smelting technology at the Nadezhda Metallurgical Plant.

Polyus

The Polyus Research Centre (RC) was established in 2003 with the creation of the Mineralogical Research Laboratory, the Mineral Processing Laboratory and the Mineral Analysis Laboratory. By 2005, the number of laboratories had increased to seven. Today, the Research and Development Centre is a general contractor for all of the Company's research and development work and supports the operations of its gold refineries (80% of the work is done in-house and 20% is subcontracted). In 20 years, RC's staff has grown from 8 to 234. More than 700 R&D projects have been implemented and 36 patents for inventions have been registered.

What the Polyus Research Centre is working on:

• A pilot research laboratory was set up in 2022. It reproduces and simulates an ore processing cycle using gravity flotation technology with a capacity of 30-35 kg/h.

• Pilot tests for the implementation of the flotation circuit at KRET. As a result, the increase in throughput recovery was 5.8%.

• Search for Russian or Chinese reagent analogues. More than 300 samples of different types were tested. The projected market expansion effect is 60-205 million roubles per year.

• Optimisation of flotation concentrate preparation technology (effectively recovered and extracted minerals) prior to bio-oxidation process with 1.3% operational extraction gain.

• Optimisation of the reagent mode of ore processing technology. Result - 5% increase in throughput recovery.

Severstal

R&D at Severstal is an infrastructure for the entire development cycle of an innovative product: from the idea and the construction of predictive models to the production of prototypes and the evaluation of sample properties in in-house laboratories, as well as quality control. A system of "reverse engineering" is used: the chemical composition of the product and its rolling and machining processes are modelled on the basis of the properties required by the customer. The hypotheses are tested on the company's own prototyping system. It simulates the entire chain of production processes and is implemented at the company's production facilities in Cherepovets. A team of experts - specialists in electronics, automation, design, machine vision and project management - is available for quality control. Where necessary, the expertise of leading Russian research institutions such as ITMO University is called upon.

What Severstal is working on

• Equipping metallurgical plants with their own quality control systems - video inspection, geometric control, smart sensors for measuring impact force, temperature and humidity, and a prototype system for monitoring the magnetic properties of steel products in use. Major suppliers of such equipment have previously left Russia. A metal spillage detection system has been developed for an external customer: a machine vision system that captures critical events in the technology. The control systems have a large scalability potential in various industries and a large export potential.

• A range of solutions for oil and gas infrastructure construction. For example, the Deformax and Cordis range of robust and reliable pipes, the Kolchuga protective coating that protects pipes from mechanical damage, and Cryonix cryogenic steel for LNG projects.

• Co-developed C390P, a high-strength steel grade for the construction industry, in collaboration with the National University of Science and Technology MISIS. It improves the fire resistance of industrial and urban infrastructure. According to the results of fire tests, C390P showed greater resistance than its analogue: 24 minutes against 14 minutes. The development makes it possible to slow down the destruction of steel structures in the event of fire. This gives additional time for evacuation of people. C390P can be used in the production of structures for shops, food courts, warehouses, industrial facilities and public areas.

NLMK

In 2019, NLMK launched a corporate centre for analytical research. It studies the behaviour of materials, operates a mechanical testing laboratory and conducts simulations of the full cycle of metallurgical processes. A computer modelling group develops and applies methods for calculating the state of metals and numerical models of the main industrial units. The main laboratory base is in Lipetsk, while the centre of excellence for computer modelling and development of high quality coatings is in La Louvière, Belgium. The research team includes Russian and foreign scientists, postgraduates and students from Russia, Belgium, Italy, Spain and India. In total, NLMK's R&D department employs over 100 people, including 26 PhDs and one post-graduate student.

What NLMK is working on:

• High-manganese steel technology. It reduces production costs and increases customer value by increasing magnetic permeability and reducing hardness.

• Recycling of by-products, including those from coke and chemical plants.

• Production technology to produce rolled products with differentiated (different thickness) zinc coating on both sides, which reduces costs.

• Rolled steel with an antibacterial coating. It protects the surface of the metal from harmful micro-organisms and is suitable for indoor applications in hospitals or canteens. The coating is based on compounds of copper and silver ions that destroy the cell membranes of bacteria and fungi.

Attracting R&D talent

One of the global challenges for steel companies is attracting talent. For example, a survey by McKinsey shows that 71% of mining companies worldwide suffer from a talent shortage. This prevents the company from solving production and strategic tasks.

R&D structures are also always looking for talented specialists, but their requirements are quite strict, according to representatives of metallurgical companies interviewed by RBC Trends. For example, they must have a good basic knowledge of natural sciences, metallurgy, mathematical modelling and data analysis, process modelling (static, dynamic, digital twin), systemic thinking, project management and economic evaluation. Soft skills are also required - communication skills, customer focus, creative thinking and openness to new ideas, English language skills to keep abreast of global market trends."The key peculiarity of R&D activities in each of the highly specialised fields is that it is often not only difficult, but sometimes impossible to attract a specialist with the required qualifications from outside. That is why our main focus is on developing the necessary competencies within the institute, attracting the best young specialists, and creating conditions for their development," says Alexander Vartomo, General Director of the Gipronickel Institute.

According to Alyona Starodubtseva of Polyus, the company works in several directions to attract talent: it scouts the market for personnel, improves personnel skills through experience exchange, organising cross-functional cooperation, training programmes, and organising pre-graduate and practical training for students. In their final years, they are placed in part-time jobs.

Petr Mishnev from Severstal says that the company develops and attracts personnel through special programmes. For example, the Top Technologists programme is aimed at finding and training its own experts: people who can cope with highly complex tasks related to improving the quality of rolled metal products, developing new types of products, and improving technologies. And the Steel Hub programme is aimed at engineering graduates in the fields of metallurgy, physics, chemistry, design, computing and mathematical modelling. It immerses future specialists in solving practical problems relevant to Severstal.

NLMK relies on the synergy of experienced technologists, who know production well, and yesterday's academic scientists, who are strong in theoretical issues. "Their joint participation in complex projects makes it possible to harmoniously combine a practical approach with an innovative view of apparently familiar processes," the company concludes.