Resource Boom in Australia: Impact on Mining Industry and Economy

Running head: ECONOMICS FOR BUSINESS
Economics for Business
Name of the Student
Name of the University
Author note

ECONOMICS FOR BUSINESS1
Executive Summary
The report is prepared to analyze the mining industry of Australia. Mining is one of vital
traditional sector of the Australian economy benefiting the economy from various aspects.
The phase of resource boom is one important phase of the economy. The event has a
significant impact on the mining sector and other major macroeconomics variables. The report
focuses on discussing resource boom in Australia that was started in 2003 and continued for
a long period and its impact on associated industry and the on the Australian economy. The
impact of resource boom however was not limited within the industry itself. The impact spread
over the economy as observed in terms of a higher economic growth and higher inflation. A
restrictive fiscal policy was undertaken during this time in order to stabilize the resource boom
along with achieving a stable outcome for the economy as a whole.

ECONOMICS FOR BUSINESS2
Table of Contents
Introduction.................................................................................................................................3
Mining Industry’s background.....................................................................................................3
Assessment of market structure of mining industry....................................................................4
Introducing resource boom in Australia......................................................................................5
Analysis of Resource boom in mining sector and in the Australian economy............................6
Government policy to address the resource boom.....................................................................8
Conclusion..................................................................................................................................9
Reference list............................................................................................................................10

ECONOMICS FOR BUSINESS3
Introduction
Australia is well-known as a lucky nation having enviable amount of wealth. The nation
has abandoned stock of resources underneath the soil supplying raw material for most
industries. Exports of minerals comprises 35 percent of total export of Australia. Being
situated at the doorstep of China, Australian economy enjoys a central position to exploit
growth miracle of China (Ivanova 2014). The faster growth of China’s economy significantly
increased the demand for Australia minerals. Among the mineral resources of Australia, Gold
has occupied an important position due to its historical importance. In modern Australia also
Gold remains an important and big element of the economy. In the Australian export, Gold
ranked third only after the export of coal and iron ore. Australia is the largest exporter of coal
in the world. Apart from Gold and Coal, there are several other minerals mined in Australia
giving opportunities to corporate to build a profitable and diversified mining sector. The mining
sector in Australia is responsible for production, exploration and selling of various other high-
demand commodities. These are metals such as nickel, copper, aluminium, silver, diamonds
and other precious metals (Ergas and Pincus 2014).
Realizing the importance of mining industry in the Australian economy, the report
analyzes the mineral sector of Australia. The phase of resource boom is one important phase
of the economy. The event has a significant impact on the mining sector and other major
macroeconomics variables. The report focuses on discussing resource boom in Australia that
was started in 2003 and continued for a long period and its impact on associated industry and
the on the Australian economy.
Mining Industry’s background
Australia possesses a huge supply of several minerals, hydrocarbon and other non-
mineral reserves. This helps Australia to establish a well-developed mining industry. Australia
is a world leading producers of iron ore, gold, zinc, lead and nickel. Because of huge
endowment of mineral resources Australia enjoys a comparative advantage in export of
mineral resource. Almost 50 to 60 percent of total export belongs to the mining industry. The
contribution of the industry in national output can be traced from its contribution to Australia’s
GDP. Nearly 7 percent of Australia’s GDP belongs to the mining sector (Export.gov. 2019).
Being one of larger producers of minerals, Australian mining industry provides significant
opportunities to US suppliers in terms of high demand for high-tech equipment.
Figure 1: Exports of mining industry
(Source: Garnett 2015)