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Mining Industry and Resource Boom

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Added on  2022/11/09

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This presentation discusses the mining industry in Australia, its contribution to the economy, and the resource boom that began in 2003. It covers the impact of the resource boom on the mining industry and the Australian economy, the market structure of the mining industry, and government policies. The presentation also includes statistics related to the mining industry in Australia and references for further reading.

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Mining Industry and Resource
Boom
Name of the Student
Name of the University
Course ID

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Introduction
Australia Mining
Important primary sector
Contribute to GDP, employment and export earning
Iron ore, Nickel, Copper, Aluminium, Gold, Copper, Silver, Uranium, Diamond,
Zinc, Opal and
Resource boom since 2003.
Terms of trade, exchange rate and increase in export demand
Impact on Mining industry
Impact on Australian economy
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Background of Mining Industry
Most well-established sector
Accounts 7% of GDP
Largely export oriented sector
50-60 percent of national export
iron ore, gold, lead, nickel and zinc
Western Australia, Queensland and NSW
Value increased from $24 billion to $147 billion
Expansion of mineral export
Main export are coal and iron ore
Figure 1: Value of
mining industry
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Market Structure of Mining
Industry
Highly concentrated market
Oligopolistic in nature
Dominance of few large companies
BHP Billiton, Rio Tinto, Xtrata, Shell, Woodside Petroleum
and Chevron
Other small companies
Similar to oligopoly market.

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Resource Boom
One significant event
Began since 2003
Increase in global commodity price
Favorable terms of trade
Increase in export demand
Increase in investment in resource sector
Price of iron ore increases to approximately $170 per tonne
Price of thermal coal increased nearly to $180 per tonne
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Impact of Resource Boom on
Mining Industry
Expansion of resource sector
Investment in coal, iron ore and LNG sector
More important than previous boom
Growth of bulk commodity export
Increase in share of mining in GDP
Increase in share of employment
Highest expansion in the last 50 years.Figure 3: Statistics related to
mining industry in Australia
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Impact of Resource Boom on
Mining Industry
Rapid growth in revenue of
Output expanded by 3 percent
Employment is doubled
Growth of capital stock
Increase in demand of minerals
Outward shift of the demand curve
Increase in equilibrium price
Increase in equilibrium quantity
Figure 4: Demand and
supply in the mining
industry

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Impact of Resource Boom on
Australian Economy
Overall positive impact
Increase in per capita income
Increase in purchasing power
Increase in volume of output
Higher investment in the mining sector
Increase consumption and other spending
Increase in terms of trade
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Impact of Resource Boom on
Australian Economy
Increased capital stock
Real exchange rate increases by 44 percent
Stronger employment
Lower unemployment rate
Higher price of energy
Upward pressure in inflation
Higher aggregate demand
Increase in both GDP and price level. Figure 4: Mining boom and
effects on Australian
economy
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Government Policy
Policies to stabilize the economy
Restrictive fiscal policy
Economy received strong stimulus from resource boom
Contraction in government expenditure
Took away $50 billion
Gather funds to spend during recession
Recovery after ends of resource boom

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Conclusion
Mining: important sector
Contribution in GDP and employment
Significant contribution in export
Expansionary phase since 2003
Resource boom
Growth of industry output and employment
Positive impact on overall economy
Higher GDP growth and higher inflation
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References
Chapman, R., Plummer, P. and Tonts, M., 2015. The resource boom and socio-economic well-
being in Australian resource towns: a temporal and spatial analysis. Urban
Geography, 36(5), pp.629-653.
Eklund, E., 2015. Mining in Australia: an historical survey of industry–community
relationships. The Extractive Industries and Society, 2(1), pp.177-188.
Ellem, B. and Tonts, M., 2018. The global commodities boom and the reshaping of regional
economies: the Australian experience. Australian Geographer, 49(3), pp.383-395.
Gregory, B. and Sheehan, P. 2019. The Resources Boom and Macroeconomic Policy In
Australia. [online] Vu.edu.au. Available at:
https://www.vu.edu.au/sites/default/files/mcd/pdfs/AER No 1 Exec Summ.pdf [Accessed 18
Sep. 2019].
Guilmi, C.D., Gallegati, M. and Landini, S., 2017. Interactive Macroeconomics. Cambridge
Books.
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References
ig.com 2019. Mining in Australia: Everything You Need to Know. [online]
Available at: https://www.ig.com/au/news-and-trade-ideas/shares-news/mining-in-
australia-190102 [Accessed 18 Sep. 2019].
Jenner, K., Walker, A., Close, C. and Saunders, T., 2019. Mining investment beyond
the boom. RBA Bulletin, March, viewed, 6.
Marais, L., McKenzie, F.H., Deacon, L., Nel, E., van Rooyen, D. and Cloete, J.,
2018. The changing nature of mining towns: Reflections from Australia, Canada
and South Africa. Land use policy, 76, pp.779-788.
Marcos-Martinez, R., Measham, T.G. and Fleming-Munoz, D.A., 2019. Economic
impacts of early unconventional gas mining: Lessons from the coal seam gas
industry in New South Wales, Australia. Energy policy, 125, pp.338-346.

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