Resource Boom in Australia: Impact on Mining Industry and Economy

Economics for Business
Name of the Student
Name of the University
Author Note

INTRODUCTION
• Australia: enviable amount of wealth
• Abandon stock of resources
• Raw material for most industries
• Minerals export comprises 35 percent of export
• World largest exporter of coal
• Nickel, copper, aluminum, silver, diamonds and other precious metals
• Resources boom started since 2003

MINING INDUSTRY’S BACKGROUND
• Several minerals, hydrocarbon and non-mineral reserves
• A well-developed mining industry
• Iron ore, gold, zinc, lead and nickel
• Contribute 50 to 60 percent of total export
• 7 percent of Australia’s GDP
• 370 acting mining sites
• Western Australia, New South Wales and Queensland
• Generates huge employment Figure 1: Exports of mining
industry

MARKET STRUCTURE OF MINING
INDUSTRY
• High concentration ratio in mining
• Concentrated among few firms
• 1300 mining companies
• Few large firms dominate
• BHP Billiton, Shell, Chevron and Rio Tinto
• Homogenous oligopoly market.
• Restricted entry: huge capital requirement.