#343 2000 · Goldcorp · Miningwrong-door
Goldcorp couldn't find the gold its own geologists knew was somewhere in its mine, so it published every secret it had and asked strangers to find it instead.
the problem
an organization sitting on a valuable but underused asset has run out of internal expertise to unlock its full value
background
Goldcorp's Red Lake mine in Ontario had a rich, decades-long production history, but by the late 1990s output had fallen to around 50,000 ounces a year and the company's own geologists could not agree on where the remaining gold actually was. Red Lake's geology was famously stripey and hard to model, and mining convention held that a company's core survey and drilling data — the exact record of what lay underground — was among its most closely guarded assets, never handed to outsiders, let alone rivals, for free.
CEO Rob McEwen, after hearing how Linus Torvalds had used the open internet to let outside programmers improve Linux faster than any single company's engineers could, faced a choice: keep funding the same internal team working the same proprietary data, or open the data itself to whoever might see something Goldcorp's geologists had missed. Every competitive instinct in mining argued against publishing raw exploration data — it was the one thing standing between Goldcorp and a rival buying the claim outright.
the move
In March 2000, Goldcorp posted 400 megabytes of Red Lake's actual geological survey data on the open internet — core samples, drill logs, three-dimensional models, 50 years of proprietary exploration records — and launched the Goldcorp Challenge: $575,000 in prize money to anyone, anywhere, who could analyze the data and tell Goldcorp exactly where to drill next.
the payoff
More than 1,400 entrants from over 50 countries — including geophysicists, graduate students, military analysts and consultants who had never set foot in a mine — downloaded the data and submitted target coordinates. The winning entry came from an Australian graphics team that had never seen Red Lake in person but built a 3-D model exposing patterns the site's own geologists hadn't flagged. Contestants identified 110 targets, over 80% of which yielded significant gold, unlocking deposits worth well over $3 billion and taking the company from roughly $100 million in value to a multi-billion-dollar producer within years.
what came after
The Goldcorp Challenge is now a standard teaching case in open-innovation courses, cited alongside InnoCentive and the Netflix Prize as proof that publishing a hard problem's raw data to strangers can out-perform paying the same specialists to solve it internally — the model has since been copied by oil and gas exploration, pharmaceutical drug-target hunts and government R&D challenges.
filed under
references
- [1]History of Challenges: The Goldcorp ChallengeHeroX, 2020herox.com
- [2]He Struck Gold on the Net (Really)Fast Company, 2002fastcompany.com