ECONOMICS ASSIGNMENT.

Running head: ECONOMICS ASSIGNMENT 1
Economics Assignment
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ECONOMICS ASSIGNMENT 2
Introduction to business and general environment
Introduction
The size and scope of mining in Australia depend much on the unique geology of the
landscape in Australia. Australia is richly endowed with natural mineral resources. It is reported
that Australia holds the largest reserves of iron ore and gold in the world (Deloitte, 2017). The
country also boasts of having the second-largest reserves of bauxite and copper and fifth-largest
reserves of black coal. Such significant natural resource endowments form the fundamentals of
Australia’s comparative advantage with regards to the mining industry. Australia’s comparative
advantage has also been facilitated by the fact that there are innovative and competitive factories
that are backed by sound policies and efficient regulatory practices. The Australian economy has
been ranked as a global leader in the production of several minerals such as iron ore, lead, zinc,
gold, and coal. The production of iron ore accounts for over half of the resources extraction
elements of the sector in terms of value addition.
About the company
Lion One Metals Limited has its roots from Canada where it is listed as a development
and exploration enterprise focused on pioneering its 100% owned, low cost and high-grade
underground project in Tuvatu Gold in Fiji (Lion One Metals, 2018). Tuvatu was given the
permission to move on with its prospects for development by the Government of Fiji and issued
with a mining lease after a 21-year agreement regarding surface lease in 2014 (Bloomberg,
2019). The company is governed by a team of management with a robust experience that has a
track record of success in mining ventures and exploration of minerals and came to existence

ECONOMICS ASSIGNMENT 3
following the completion of a reverse takeover between X-Tal Minerals and the American Eagle
Resources in 2011.
The company engages in activities such as exploration and evaluation of minerals in Fiji and
Australia. Lion One Metals explores gold and iron ores. However, the company’s major asset is
the Tuvatu gold project situated in Fiji on the island of Viti Levu. Lion One Metals Limited has
its headquarters in North Vancouver, Canada.
Competitors
The ASX200 lists 26 publicly-listed metals and mining enterprises comprising the
heavily weighted materials industry. The Australian materials sector accounts for more than 18%
of the ASX200 index. The future of the Australian share market just like the total Australian
economy is substantially propelled to the underlying ability of the mining industry. Some of the
robust competitors include BHP, Rio Tinto and South 32.
Rio Tinto
Rio Tinto is a global, dually-listed enterprise and has been ranked as one of the most
prominent mining enterprises in Australia. The company mines a variety of minerals,44% of the
company’s sales are obtained from the extraction and exporting of iron ore (Rodda, 2019). The
company not only mines iron ore but also mine other minerals such as copper and gold among
others. The company apart from benefiting from Australia’s mining boom in the 2000s, its
strategy has been focused on the east with plans to expand its business into Asia. Rio Tinto takes
pride in its market capitalization of $ 27 billion, rendering it Australia’s second-largest miner by
size and among the top 20 largest businesses in Australia.
BHP Billiton

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BHP Billiton is ranked the second largest enterprise and the largest miner on the ASX
using market capitalization. The company has a value of over $97 billion. The company
specializes in the exploration and production of gold, iron ore and coal among others. BHP also
obtains revenue from other activities such as exploration and refining of petroleum. BHP is the
world’s leading commodity producer and has operations headquartered in Melbourne and
London.
South 32
This company has been ranked as the third-largest miner based on market capitalization
in ASX, rallying behind BHP and Rio Tinto (Rodda, 2019). However, this a new enterprise in
the market and was curved out of BHP in 2015 to align the business. The company’s focus is
majorly on base metals, nickel, lead, and zinc. The company operates in Australia, South Africa
and some regions in South America.South32 has less interest in China compared to other miners,
thus getting less than a fifth of revenues from China. The company has thus positioned itself in
markets located in Africa and Europe.
Main customers of gold
For thousands of years, gold has been used to create ornamental objects and jewelry. As
of today, the main buyers of gold are jewelers. It has been reported that 78% of the gold
consumed annually is to manufacture jewelry.
The other main customers of gold are the manufacturers of electronics. Gold being an
efficient conductor is used to move tiny currents and still be free from corrosion. A small
proportion of gold is used in almost all complicated electronic device.