It is 3 1/2 years since Draslovka’s $521 million acquisition of Chemours Mining Solutions that transformed the Czech company into the No. 1 supplier of sodium cyanide. CEO Pavel Brůžek and Draslovka’s private backers were looking forward to reaping the rewards of such a bold step, given all indicators were pointing to higher gold prices and a recovery in mining investment.
But since completing the Chemours deal, Brůžek was able to crack on with the integration work done as planned, but it has been a hell of a wait for gold to rebound.
“I was losing hope two years ago and thought about sending a warranty claim to my expensive university as everything they taught me wasn’t working: gold should have been at $3,000, but it was at $1,800,” Brůžek, who started out as an engineer before flipping to finance, said in an interview with chemicalESG.
Fortunately for Draslovka, the gold price has now finally bounced back to around the $3,300 mark. Traders of the precious metal are typically the first to benefit; then, sure enough, it trickles down to the miners who start to think about investment. Only at that stage do the suppliers of leaching reagents and cyanides like Draslovka enjoy the upturn. Usually, the sodium cyanide market grows about 4% a year, yet a lot of investment has been on hold in recent years.
Perhaps scarred by gold not behaving as expected, the mining industry is now not only spending on debottlenecking and boosting capacity, but showing much more of an interest in digitization, automation, sensors, and AI tools to improve efficiency, maximize returns from ore, while minimizing waste. One of their biggest challenges is that ore quality can fluctuate from one moment to the next, and the old way of sampling and metallurgical analysis every two days or whatever just doesn’t cut it in the highly competitive, commodity market anymore.
Draslovka is now pushing beyond chemistry, into tooling up customers with in-line devices and real-time platforms to monitor incoming ore quality, and levels of cyanide in glycine and slurry tanks. The Blue Cube analyzers capture reflected light from particles in a scanner. The amplitude of different wavelengths provides a spectral profile that reveals various minerals. That creates a fingerprint that can be compared to known mineral compositions.
Customers pay for the digital devices via a subscription and Draslovka can take a share of the financial upside.
A few mining operations are well plugged-in but the vast majority are flying blind, without the tools to provide real-time insight, Brůžek said. That’s an issue if 100 tons of rock is coming through for processing and you’ve only taken five samples that aren’t representative.
“It’s helping to bridge one of the biggest gaps in mining,” the CEO said. “Mining is not super efficient, not because they are incapable. It’s just because they cannot fix the incoming raw materials. It’s hard to be super efficient with the process if you don’t know what is coming in. They were missing a data point that they would love but didn’t have the tools that are financially reasonable and that work very quickly.”
Mining is a slow-to-evolve sector, so tech can be a tough sell. Given the heavily commoditized nature of metals, executives historically have tended to take a dim view of any additional spending that would hurt margins in anyway, he added. So it helps when gold prices are up.
Draslovka has so far installed more than 100 AI-empowered sensors. It is looking to become a one-stop shop for specialty chemicals and mining solutions.
That means global coverage in order to be a local-for-local supplier.
“We will be focusing on geographical diversification, mostly through partnerships and joint ventures through our technology and innovation advantages that we have,” the CEO said.
“With the end of globalization, it’s important to move the production capability closer to the final markets and customers, especially when you are talking about such delicate products like cyanides. Most countries are at risk from trade wars and, with gold being up, that’s the place where clients will start valuing the stability of supplies, rather than purely on price,” Brůžek said.