It is no secret that mining remains a cornerstone of the Australian economy. According to the government’s Department of Industry, Science, Energy and Resources (DISER), the resources sector posted record high exports worth A$310bn ($225bn ) between 2020 and 2021, and estimates this value to grow to A$379bn ($275bn ) by the end of the 2022 financial year.
It is also no secret that despite its importance, the sector faces a range of challenges. From its environmental footprint – Australian exported coal alone is responsible for around 2.9% of global carbon dioxide emissions – to declining ore grades – with the average copper grade in Australia falling from around 15% in the late 19th Century to around 2% today – the sector is under constant pressure to improve operations.
This is to say nothing of the quarter-million people employed directly by Australian mines, accounting for around 2.1% of the country’s total workforce.
But these pressures do not necessarily mean the sector is headed for disaster. Indeed, the combination of high mineral demand and ever-increasing employment has helped foster a culture of constant innovation and improvement in Australian mining.
With demand unlikely to falter any time soon, Australian miners and governments alike have encouraged invention and investment into the country’s mining sector to keep the train on the tracks. One such project is DISER’s Accelerating Commercialisation (AC) initiative, which delivered around A$12m ($8.7m ) in grants to encourage invention in mining and is the latest scheme to build on this legacy of innovation.
The Accelerating Commercialisation initiative
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“AC is a service within the Entrepreneur’s Programme (EP) that supports clients to achieve early commercialisation objectives,” explains a DISER spokesperson. “Rather than aiming at immediate impacts for the broader Australian economy, AC is a long-term investment in Australia’s economic future.”
The EP is an older project, described by the spokesperson as the national government’s “flagship programme supporting business growth, innovation, and commercialisation”, since 2014. Between October 2014 and December 2021, the EP initiative delivered grants to 573 businesses worth more than A$281m ($203.9m ), of which 58 grants, worth A$32.4m ($23.5m), went to companies in mining, energy, or oil and gas.
The grants themselves are available for any small or medium-sized business to apply for, and successful applicants can receive up to A$1m ($730,000) in matched funding. While the DISER spokesperson describes Australia’s general entrepreneurial environment as “positive”, they acknowledge that challenges remain for smaller businesses, especially with regards to networking and promotion, which the EP and AC initiatives aim to tackle.
“Australia has positive conditions for entrepreneurship, but difficulties with commercialisation and scaling businesses,” says the spokesperson. “EP assesses business innovation needs and then provides expert advice about building connections [and networks], connecting with other organisations and capabilities in the Australian innovation system and grant funding.
“Evidence suggests that this enables firms to undertake higher value innovation activity, [with] greater novelty and frequency, and position themselves for business growth.”
The AC project has delivered a number of successes for its participants, with DISER figures suggesting positive impacts across the project. According to the department, 72% of participants generated new capital following their work with the project, equivalent to A$3.75 ($2.72) for each A$1 ($0.73) invested as part of the initial programme involvement. In addition, 73% of participants reported a growth in “full-time equivalent” positions, and 68% attributed an increase in turnover to the commercialisation of their products.
Specific grants, broader benefits
Announced in January, the latest round of grants includes a number of mining and industrial companies, including New South Wales-based Biocarbon, which aims to decarbonise the Australian steel industry, and Tribe Technology, which looks to use autonomous technology to double the speed of drills.
“Tribe Technology is a recent grantee example of how EP and AC supports the resources and mining sector,” explains the spokesperson. “In January 2022, the company was awarded A$864,040 ($626,934) to develop its advanced, autonomous tribe sampling system for integration into reverse circulation drill rigs for the global mining and drilling services sector.
“Individual programme elements, including AC, contribute to addressing a mix of market failures, [such as] information failures, asymmetries or imperfections, and innovation system failures [including] firm-level capability deficiencies and weak networks,” they continue, drawing attention to the specific challenges facing small and medium-sized miners, and how the project looks to overcome them.
The AC grants in particular have the potential to make a significant difference for the mining industry, where the high costs associated with exploration, processing, and mineral transportation often sap funds that could otherwise be put towards projects such as networking.
Engine, filtration, and power generation company Cummins estimated that the world’s top 40 miners spend $78bn on capex a year, and while these figures are not representative of the outgoings of small miners, this is a figure in line with the approximate GDP of Kenya, highlighting how steep start-up costs can be in the mining industry.
It is also worth noting that the AC programme is specific in nature, helping individual companies overcome particular challenges. Yet the DISER spokesperson is adamant that by tackling these individual obstacles, the project can help deliver benefits for the Australian mining industry, and entrepreneurial environment, as a whole.
“Support provided by AC is given for a specific purpose – to achieve commercial outcomes, rather than general business ideas,” they explain. “Businesses usually finish the AC service having commercialised their grant project.
“They also gain an in-depth understanding of the complexity of the commercialisation process to: help get their ideas to market faster, be it domestically or in overseas markets; improve their ability to commercialise intellectual property; and create value, including the ability to raise new capital. In some cases, participants also gain an ability to reduce production costs.”
Of course, obstacles remain for the Australian mining industry that cannot be tackled by a single government grant. The macro challenges of declining ore reserves, mining’s inherently polluting by-products, and the dangers of so much of a country’s workforce having their lives and livelihoods tied to a single sector are not going away any time soon.
The AC project also faces more unique challenges, with the DISER spokesperson highlighting a “valley of death” in the start-up process that many companies fall into, which the AC grants will look to overcome.
“Government financial support continues to be an alternative avenue for a business that has a novel idea to breach the ‘valley of death’ that occurs between research and development and full-scale commercialisation,” they say.
“Innovative businesses bring new products and services to market, thereby contributing to increased productivity and economic growth through the creation of high-value jobs. As a result, it is important to create the right environment to ensure that our world-class research and innovation can be effectively commercialised.”
The importance of constructing a positive environment for innovation is reflected in the range of other grants and projects offered by the Australian Government. The spokesperson points to the Modern Manufacturing Strategy (MMS), a “whole-of-government” approach to creating a suitable environment for innovation, as an example of nationwide support for this kind of broader change.
“Associated initiatives look to provide specialised support, products, and solutions to the mining and minerals processing, exploration, and extraction industries,” they say. “The road map for the national manufacturing priority of resources, technology, and critical minerals processing also provides a clear signal of the important, ongoing role that resources technology firms play in adding value to the mining supply chain beyond resource extraction.”
Projects such as the MMS have already received significant investment and look to address these challenges. The Modern Manufacturing Initiative, a key part of the MMS, has received A$1.3bn ($940,000m) in funding and looks to encourage innovation in sectors as varied as medicine, clean energy, defence, and space.
With projects such as these hopefully changing the entrepreneurial landscape of Australia for the better, perhaps small-scale initiatives like the AC can deliver the benefits that can help prolong the Australian mining industry for another generation.
“AC continues to be a highly competitive program,” says the spokesperson. “We expect continued interest in AC’s assistance, which includes expert guidance, connections, and grants to help businesses and researchers to commercialise their novel product, process, or service.”