R&D Perspectives In The Mining Industry

Companies across a range of industries spent US$ 2.3 trillion in 2019, or 2% of global GDP, in R&D, according to Brennan (2020). The pharmaceutical industry leads the way, spending 52% of the EBITDA on R&D, which equates to US$ 178 billion.

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Oil and gas, in comparison, spent only 3% of EBITDA or US$ 28 billion in the same period. The mining industry is not stratified in Brennan’s study but is traditionally lower than oil and gas.

Filippou and King (2011) mention a very low R&D intensity in the mining industry, around 0.5% measured as R&D expenditure/gross revenue, compared to other sectors like IBM (6.1%), Boeing (10.7%) and AstraZeneca (13.4%).

Figure 3- R&D spending trend in the mining industry, data from Alcoa, Anglo American, ArcelorMittal/Arcelor, BHP Billiton, Boliden, Cameco, Codelco, Eramet, Iluka, Rio Tinto, Sumitomo, Metal Mining and Teck

The graph shows that R&D spending in the mining industry steadily decreased up to 2006. The increase after 2006 is attributed to the reduction in revenue after the GFC instead to an actual increase in R&D spending.
 
The mining company's profit was high from 2000-2010, before the GFC. It led to consolidation via mergers and acquisitions, which reduced the R&D departments …