Analyzing the Contribution of Natural Resources to Australian Economy

This report provides a comprehensive analysis of the contribution of natural resources to Australia's economic growth. It begins with an overview of the exploitation of natural resources, emphasizing the dominance of minerals, ores, fossil fuels, food, and timber in shaping the economy. The report details the methods used to quantify resource use, including the material footprint approach, highlighting Australia's high per capita consumption and export rates. It then explores the significant role of the resource sector in Australia's economic upliftment, including its contribution to GDP, employment, and exports, particularly in coal and iron ore. The current economic scenario is examined, including the impact of fluctuating oil prices and technological advancements in resource exploration. The report also addresses the environmental impacts of mining and coal industries, focusing on pollution, water contamination, and climate change, and the importance of regulatory measures. The conclusion summarizes the key findings and emphasizes the need for sustainable practices to balance economic growth with environmental protection.

Running Head: Contribution Of Natural Resources In Enhancing Economic Growth Of Australia
CONTRIBUTION OF NATURAL RESOURCES IN ENHANCING
ECONOMIC GROWTH OF AUSTRALIA

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Contribution Of Natural Resources In Enhancing Economic Growth Of Australia
Table of Contents
Introduction......................................................................................................................................3
Analysis...........................................................................................................................................3
Overview of the nature of exploitation of natural resources in Australia....................................3
Contribution of the rich resource base of Australia towards its economic upliftment................4
The current scenario of the Australian economy.........................................................................5
Impact on the health of the environment.....................................................................................6
Conclusion.......................................................................................................................................7
Reference List..................................................................................................................................9

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Contribution Of Natural Resources In Enhancing Economic Growth Of Australia
Introduction
Australia enjoys a huge comparative advantage in the primary resource sector. The
current boom in the mining industry has generated huge revenue to the federal and the state
governments of Australia. This essay focuses on the nature of resource industries which are
situated in Australia. It also mentions the potential dangers which are attached to the mining and
coal industries. The Australian economy is highly dependent on the exploitation of the resource
sector which has a profound impact on changing the climatic conditions of the country.
Analysis
Overview of the nature of the exploitation of natural resources in Australia
The Australian economy has been characterized as the largest market for natural
resources in the world. According to a survey, it can be easily said that minerals, ores, fossil
fuels, food, and timber play a major role in shaping up the economy. The methods which are
used for quantification of the use of natural resources within an economy vary from country to
country. The method which is used in Australia incorporates the actual flow of energy, waste,
materials, and emissions within a particular economy. This method of quantifying the use of
natural resources is useful because it throws light on the local consumption of resources. This
can be defined as the quantity of energy flow and materials consumed per capita for the desired
region (Sonderegger et al. 2017). However, there is a major drawback of this approach. It does
not take into account the requirements of resources of exports and imports.
One important approach which needs to be mentioned in this context is a material
footprint. It measures the net requirement of natural resources within an economy to meet the
total consumption needs of the region. It also takes into account whether the desired resources
are imported from elsewhere or available within the local economy. This method requires extra
data on materials which are traded globally. Hence this method is much more complex than the
earlier approach. However, the material footprint of Australia is approximately 35 tones of
resource consumption per capita. It implies a massive improvement than the earlier figures. The
reason for such improvement is a major section of the natural resources which are harvested and

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Contribution Of Natural Resources In Enhancing Economic Growth Of Australia
extracted within the domestic boundaries of Australia are exported to global markets. This
implies that the total rate of extraction of natural resources in Australia is much higher than any
other nation in the world. It can be easily said that the demand for resources is much higher in
case of growing and developed economies (Garrick & O'Donnell, 2016).
The data suggests that although the overall scenario of Australia looks somewhat bloated,
the actual case is something else. The per capita consumption of natural resources in Australia is
much higher than in other nations of the world. Many theorists and researchers believe that
Australia still has to cover a long way to attain a resource-efficient and low carbon emission
economy.
Contribution of the rich resource base of Australia towards its economic upliftment
The entire history of economic growth in Australia is quite interesting and remarkable. It
had survived through many downturns and global crisis. The main attribute of this remarkable
performance is the rich supply of natural resources in Australia. The energy and the resource
sector have contributed the top 10 percent of the entire GDP of Australia. This sector gives
employment to nearly 300000 people in Australia. It also forms a huge part of total exports of
Australia. The mining industry in Australia employs a huge number of skilled labors and is
known to pay higher wages to them. This sector has given shelter to a huge proportion of
Indigenous people of Australia (Zhang, & Moffat, 2015).
Coal and iron ore are the two main exporting commodities of Australia. Australia also
has huge deposits of liquefied natural gas and is planning to increase its net exports than Qatar. It
is the second-largest exporting country of zinc and gold. It secures the third position in exporting
nickel and the fourth position in case of copper. The income which is generated from these
exports tends to improve the entire economic scenario of Australia. It helps in the development
of infrastructure and can put a smile on the face of their workers and laborers. The mineral
industry itself paid 12.1 billion pounds in company share of tax and spent 11.2 billion pounds in
royalties in 2016-17. The mining industry recruited nearly 6599 indigenous people in 2016. The
expected wage in the resource industry was 40 percent higher than in other industries. The
resource sector contributed to 8.2 percent to Australian GDP in 2017.
The total exports of the resource industry were 252 billion pounds in 2019. The average
annual, wages paid to the workers was 135782 pounds in 2018 (Aragón et al. 2015).

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Contribution Of Natural Resources In Enhancing Economic Growth Of Australia
Furthermore, this sector employed nearly 255800 people in 2018. The history of Australia
suggests that the mining sector has played a huge role in shaping up the economy of the nation. It
helped millions of people to come out of poverty and live a better life. The history of gold
discovery in Australia was the major turning point. Many research scholars have acknowledged
that Australia is undergoing "commodity supercycle" (Altman et al. 2018).
The current scenario of the Australian economy
The price of oil has dipped from $140 a barrel to $ 40 a barrel within a short period. This
can easily imply that the Australian economy is enjoying a huge comparative advantage in the oil
industry. Recent changes in the supply side dynamics have led to this change in Australia.
However, a little amount of effort has been spent on exploring new deposits of oil. This may lead
to excess demand in the market which would eventually lead to a rising in the market price of oil
(Measham et al. 2016).
The mining and the resource industry comprises nearly 8 percent of the economy of
Australia. The total exports of natural resources were worth of 264 billion pounds in 2019.
Australia broke all records of uninterrupted and sustainable growth in the world. The major
contributor to this growth is the resource sector (Oberle et al. 2019).
The mining industry exported products worth 15 billion pounds in 2016. This sector
contributed nearly 90 billion pounds to gross value added to the Australian economy. This sector
grew at a rate of 6.5 percent annually and created new 150000 job opportunities. Australia is
witnessing technological transformation which is useful in the effective exploration of new
deposits of lithium and other precious minerals. The Australian economy is also investing a huge
amount of money in discovering new petroleum deposits. One of the recent examples is the
inauguration of the east coastal coal seam gas (CSG) in Queensland. This initiative led to an
investment of 60 billion pounds in some of the new projects situated at Gladstone. The total
employment has grown by 6500 units in the Queensland gas and oil industry in 2018. The
Galilee Basin which is situated in Queensland has nearly 29 billion tones of reserves of coal.
This has led to a boom in the exploration of greenfield technology. One of the largest basins of
Australia is the Great Australian Bight Basin which has huge reserves of gas and oil (Schandl et
al. 2016).

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Contribution Of Natural Resources In Enhancing Economic Growth Of Australia
Impact on the environment leading to climate change
The policymakers have made it compulsory for all of the mining industries to strictly
maintain the environmental norms and policies. The resource sectors are bound to follow the
safety rules and regulations which are mentioned in their licenses. To create awareness regarding
environmental safety, The Commonwealth has intervened to implement necessary strategies.
However, there are some recent phenomena which have attracted the attention of the regulatory
authorities. The accident which occurred at the Timor Sea in 2009 along with the incident of oil
leak is some of the recent issues. The contamination of aquatic bodies due to extreme deposition
of nickel and lead in ocean bed is very alarming. Many environmentalists and journalists have
found out traces of lead carbonate in water bodies (Grafton & Wheeler, S., 2018).
This has led to the deaths of many aquatic living creatures. Additionally, many organisms
have suffered death due to excessive dust pollution near the port of Esperance WA. The dust
pollution has been created due to the use of lead carbonate. The river water has changed its
natural course owing to this fact. In fact, in many regions, the rivers have stopped flowing or
have disappeared. This has led to the extinction of many species organisms which were
indigenous to Australia. This has direct and indirect impacts on the survival of the people near
the river waters (Faysse, 2018). Many people were solely dependent on the river waters for their
survival. The regulatory authorities should focus on this aspect (Cumming, 2018).
Moreover, there is huge potential for pollution of water bodies due to bubbling of gas
mainly along the Georges River which is situated to the south of Sydney. The main reason
behind this kind of contamination can be traced back to longwall techniques of extraction of coal
seams. The regulatory authorities and the environmentalists should focus on efficient
mechanisms of control and regulation in the mining industries (Fashola et al. 2016). The
operational stage of the mining industries generates many hazardous effluents and toxic
pollutants. One of the noteworthy issues which are related to the in-situ method of gasification of
coal seam gas is the ability to contaminate and acidify the surface waters and aquifers. However,
it was noted that the total costs of managing and operating a mine were much higher after its
shutdown. The operational costs of the mining industry tend to rise by 2 to 5 times after the
closing down of the mining industries (Carvalho, 2017). This occurs due to several reasons.
Various open pits and voids are left after the managers of the mining industries close their

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Contribution Of Natural Resources In Enhancing Economic Growth Of Australia
companies. Several bodies of open water become contaminated by the dust particles and the
harmful chemicals along with the contamination of the aquifer and the river bodies (Smith et al.
2016).
The land could not be further used for any purpose which means that there are now
limited options of using the land as a resource. It is important to mention in this context that land
is a very scarce natural resource and it should be optimally used henceforth. The iron ore mining
industry which was located in the Pilbara region has accounted for massive landscape impacts.
Hence it is important to calculate the long-run impact on the heath of the environment which is
attached to the closure of the mining industries (Zaimes et al. 2015).
It is important to note that mining and coal industries have negative impacts on the
climatic conditions of Australia. These industries contribute to global warming, which is a global
phenomenon. The water bodies become warmer and turn into acidic. Australia has recorded to be
the leading emitters of carbon dioxide on a per capita basis. It accounts for the production of 1.3
% of greenhouse gases in the world. The major contributor of greenhouse gases in the mining
industries and the coal industry of Australia. Furthermore, the current carbon emission rate in
Australia is 15.37 metric tons.
The economy of Australia is largely influenced by the resource sector and the mining
industries. The mineral industry of Australia has secured the fifth position in the world in terms
of producers of minerals. Furthermore, Australia is also a large exporter of lead, zinc, iron ore,
alumina, and black coal. It acquires the second place in exporting uranium. Australia has huge
deposits of natural gas. However, the production of the crude oil industry in Australia has
suffered a huge loss and is currently on the verge of shutting down.
Conclusion
It can be concluded from the essay that Australia should evaluate the costs and benefits of
the resource industries. It is quite evident from the essay that the Australian economy enjoys a
huge comparative advantage in the resource sector. However, increased reliance on the resource
sector has proved to be detrimental to the health of the environment. There are several disastrous
implications of the mining and coal industries which have been elaborately mentioned in the
essay. The culmination of all these factors has induced the researchers to evaluate the operational

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Contribution Of Natural Resources In Enhancing Economic Growth Of Australia
structures of the mining industries. The mining industries have huge impacts on the climatic
change of Australia. Hence the policymakers should focus on this matter and implement
corrective strategies to improve the current scenario.

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Contribution Of Natural Resources In Enhancing Economic Growth Of Australia
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