Economics and International Trade: Analysis of Mining Industry in Australia

Running head: Economics and international trade
ECONOMICS AND INTERNATIONAL TRADE
Name of the student
Course name
Course ID

1
Economics and international trade
Table of Contents
Introduction......................................................................................................................................2
Industry background........................................................................................................................2
The market structure of the industry................................................................................................3
Factors that influence demand for the industry’s product(s)...........................................................4
Factors that influence supply of the industry’s product(s)..............................................................5
Elasticity..........................................................................................................................................6
Impacts of an event on the industry.................................................................................................7
Conclusion.......................................................................................................................................9
Reference list.................................................................................................................................10

2
Economics and international trade
Introduction
The topic will mainly highlight the situations and current conditions of mining industry
of Australia. Through the analysis of mining industry of Australia, the study will be aiming to
reach for the various factors that are actually affecting the demand and supply of the mining
products into global market. The importance of these factors will be dealing with the elasticity in
the global perspective and will be affecting the international trade. Through the development of
mining industry, Australian economy will be flourished and will be key player in mining
industry in world. Through the detailed industry background, the study will identify the economy
of Australia in a better way. Structure of the market is important in the sense that it will be
improving the technological spill over and their impact on world economy. Moreover, the
concept of elasticity is significant because of the fact that elasticity is heavily affecting terms of
trade.
Industry background
Currently the mining industry in Australia is one of the booming industries contributing
to about 50-60% of the total national income. On the other hand, Australia is among the top five
regarding the production of gold, iron ore, lead, zinc and nickel. Not only this, but Australia is
home of largest production in Uranium and also fourth largest producer of black coal. In all over
industry there are more 370 mines of minerals. Among the 370 mines, 1/5th mines are located in
NSW, 1/2nd in Queensland and 1/3rd in Western Australia. Among the volumes, two important
minerals are iron ore and coals (export.gov, 2019).
In 2017, the total revenue earned by the mining industry including the exports of
minerals, metals and petroleum is about $207 billion or about 53%. Steel making material is

3
Economics and international trade
contributing to more than $63 billion in the last year mainly due to increased level of price and
volume (Australia, 2018). Coming to the point of employment, the Australian mining industry
employed nearly about 251,700 persons accounting for about 2% of total workforce though it has
decreased by 5.4% in past five years (Lmip.gov.au, 2019).
The mining industry is contributing about 15% to the Australian national income. In
2015-2016, the Australian mining industry has contributed to $236.8 billion to the Australian
economy (Creagh, 2017). The Gross value that has been added to the national economy by the
mining industry increased to about 8.8% in the last financial year compared to only 4.7% in
1994-95. The total valuation of the coal production in the year 2017-2018 was about $65.8
billion and this year the value of the coal production surpassed the valuation that has been
created by iron ore industry (Creagh, 2017). Even the Australian economy is also the largest
producer of LPG and the amount is about $48 billion.
The market structure of the industry
The Australian mining industry is highly competitive in nature and is vastly in production
of the minerals like Bauxite, aluminium and other minerals. In 1996-97, the Australian economy
has produced about 43 million tonnes of bauxite that was a part of world contribution of 56% of
deposit of Bauxite (Applied.org.au, 2019). Taking into the factor of global competition, Australia
can compete heavily in terms of production of Bauxite. Australia is also having the record of
high productivity within the economy. Some of the main reason that has been found out that is
benefiting the mineral environment within the economy. Taking the advantage of increased level
of world price in metals the Australian economy is helping in the development of the mining
industry. The second factor that is helping the growth of the economy in terms of mining