Foundation of a framework for evaluating the impact of mining technological innovation on a company's market value

Abstract

Technological innovation development plays a pivotal role in mineral economics. History shows that the difference between a mineral deposit's economic status and its uneconomic status lies in the mining technological innovation most prevalent in each phase of technological development. The significance of mining technology is that it curbs the negative impact of mineral deposit depletion by improving productivity, thereby keeping mineral exploitation profitable. This relationship makes it imperative to develop a framework that utilises this concept to sustain mining in the future. The framework will incorporate the benefits of technological innovation implementation to demonstrate its impact on a company's share price. It will help public investors understand share price performance while serving as an additional internal new technology investment approval tool.This paper demonstrates how applying technological development and innovation affects mining processes and its economics. This relationship is evident throughout the four historical mining technological stages, which started in the 18th Century with mechanisation, then remote control, automation, and currently, autonomous technology systems. At each stage, the need for a more productive technology arose as the effects of mineral resources depletion threatened mining's profitability. Thus, it can be judged that the future of mining profitability lies in the current advanced technologies that leverage artificial intelligence and machine learning systems. Nonetheless, while mineral commodity miners profit and firm market values grow, the growth is not empirically linked to the technological innovation development that drives it. Conversely, in other industries, the firm's technological development innovation resultant economic metrics, along with macroeconomic factors, are captured and empirically linked to stock market value. This exposes a gap in the financial impact evaluation of mining technology innovation implementation. Therefore, this paper explores the possibility of developing that framework for the mining industry by identifying improved productivity and cost metrics, profit margin growth, and the resultant share price performance.