Political Economy of International Business

Running Head Political economy of international business
0
Political Economy of International Business
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Running Head Political economy of international business
1
In introduction, the mining industry is generally involved in the extraction of metals and natural
resources, and a significant asset of the mining industry are reserves and resources and contains
ores which are workable for the mining industry. The Mining industry in Australia largely
contributes to the Australian economy that increases employment opportunities for citizens of
Australia. Australia mining industry is a leading player in the mining industry that produces 19
minerals and operates 400 mines. According to the Bureau of resources and energy economics
study, Australia largely exports minerals excluding oil and gases in 2012-13 and Australia
exports $107 billion, 59% goods and services, 71% of merchandise exports (Ambos, 2011)
Inter and Intra organizational networks theory, state relationship of subsidiary with the local host
country or parent company and part of the benefits from MNC network. In networks theory,
there are two important elements “Network” and “Relationship”. The relationship between the
subsidiary and actors called a network. Intra organizational network refers to a relationship
between the parent company and subsidiary company and inter-organizational network refers to
the relationship with the external forces like customers, suppliers, and government.
Now discussion is on the applicability of networks theory on the mining industry, the mining
industry should maintain a trust-based relationship with the other subsidiaries for efficient use of
natural resources and mining equipment’s or for the better performance of subsidiaries. In the
following essay, strength and weaknesses of networks theory are included. Strength of networks
theory is higher interdependence between the parent company and subsidiary company leads to
high profit and better performance of the subsidiary.

Running Head Political economy of international business
2
According to the recent study of industry analysts BIS oxford economics, that business in the
mining sector will increase in this financial year. The mining sector of Australia includes
exploration, production, and maintenance expected to take a significant boom in 2018 according
to the report of 2017 to 2032 of the mining sector of Australia (Battellino, 2010). The Mining
sector of Australia will enhance the global economic growth in upcoming years, sustain
commodity prices, or aid in new investment or supports mining operations expenditure.
According to the ABS National Accounts data, the mining production raises only by 2.5% and
BIS Oxford Economics forecasts the growth of 5.5% of the mining sector of Australia in 2017-
18 (Connolly, 2011).
Structure of mining industry refers to, Australia is the biggest leading producer of minerals
around the world and minerals are significant part of the economy of Australia and mainly
produce zircon, iron ore, bauxite. Australia is the second largest producer of gold around the
world In June 2012. The mining sector of Australia provides employment to the 266,000 people
in Australia. Australia is the highest exporter of minerals and contributes 10% in Gross Domestic
Product (GDP) in 2012-13 (Westgarth, 2017).
Mining companies of Australia trade across the world freely with major economies such as India,
Japan, and South Korea. Global production of the mining industry in Australia, in the past years,
reflects a substantial increase in the production and export commodities. Mining boom increases
the exports and production of minerals in Australia and results in high production in the mining
sector. China supports in the growth of mining sector of Australia, which results in expansion of
China’s economy by seventy percent and increases in the demand for mineral resources.
Now the discussion is on the market orientation of the Mining industry, Australian mining
industry provides innovation steps to reduce costs, efficient ways to increase in the production,
improve mineral recovery, and remove waste material in the initial process. Steps, which taken
by the mining industry, are they developed mining innovation hubs to resolve the challenges of
resources and they engaged with the leaders of the industry and technology start-ups to create
ways to efficient use of resources.

Running Head Political economy of international business
3
To resolve the problems of the data privacy issues, they adopt a system where large numbers of
people engage to resolve a privacy issues through software. Now discussion is on the ownership
and financing of mining industry, BHP Billiton is significant leaders in mining industry of
Australia and has 47.1 % ownership interest in the MO-ZEL joint ventures and rest of the
partners are industrial development corporation of South Africa limited(24%), Government of
Mozambique(3.9%) (Creagh, 2018). Finance sector of the BHP Billiton finance limited is that
they engage in borrowing on the behalf of the BHP group.
Now the discussion is on the Government regulations of the mining industry, Planning and
development act is comes into 2007 for Australian Capital Territory in which responsibility for
administration is in the hands of the minister, who elected by the member of government.
Environmental authorizations are significant at the ongoing process of mining. Other legislation
is to protect the environment and health and safety, employment or the people. States initiated a
system of negotiating contractual agreements due to the size and scope of iron and coal projects
of the mining industry which approved by the state parliaments (Deloitte, 2016).
For the exploration of minerals on a large scale, a license is required and for the grant of the
license application must be, file to the state, which contains information about the type of
minerals, the financial capability of the applicant, and influence on the environment.
Requirements for the application can vary from one state to another. Mining Policy Institute
incorporated in 1995 to regulate the mining issues and a civil group who is engaged in the
resolve issues of the mining sector. Australia’s 50,000 legacies work for the community,
government, and mining industry; they educate them and protect the environment and
communities through their research