Economics Assignment: Analyzing the Australian Mining Industry's Boom

This essay provides an economic analysis of the Australian mining industry, focusing on a newspaper article highlighting a potential boom driven by tech metals. It examines the industry's historical performance, stakeholder issues (particularly regarding human resources), and the impact of demand and supply dynamics. The analysis incorporates a demand-supply diagram to illustrate cyclical growth and the effects of wage rates and product demand. The essay concludes with recommendations for the Australian government, emphasizing the need for export policies and skilled labor development to capitalize on future opportunities. The essay is based on the assignment brief that requires students to evaluate a chosen topic from economic perspectives, including the essence of the story, the economic analysis, and the student's view with recommended actions.

Running head: ECONOMICS ASSIGNMENT
Economics Assignment
Name of the Student:
Name of the University:
Author’s Note:

ECONOMICS ASSIGNMENT 1
Table of Contents
Introduction......................................................................................................................................2
Review of the Selected Article........................................................................................................2
Issue of Stakeholders.......................................................................................................................3
Interpretation of the Article.............................................................................................................3
Recommendations............................................................................................................................5
Conclusion.......................................................................................................................................5
Reference List..................................................................................................................................6

ECONOMICS ASSIGNMENT 2
Introduction
The mining industry of Australia is considered among one of the most important
contributor towards the overall GDP of the country. On the other hand, the mining industry of
Australia also participates in providing extensive job opportunities for the skilled, semi-skilled
and unskilled workers of the nation and thereby substantiating the trade balance of the country
(McHugh, 2018). A popular newspaper article from ABC news pointed out a fact that the mining
industry of Australia will soon experience a major boom as the availability of the tech metals
have increased drastically in the mines of Australia. The tech metals are well known for their
usefulness in the renewable energy and technology and hence it can easily be ascertained that
this mining boom will be led by this tech industry (Fleming and Measham, 2015). On an added
notion, it has also been argued that these changes in the mining industry will pose certain
advantageous as well as disadvantages towards the economy. This specific assignment will focus
on analyzing the mining industry of Australia in the light of the selected article and with the help
of relevant demand supply diagram. This analysis will also consider the perspective of the
human resource as well. Finally on a concluding note a few plausible recommendation will also
be provided so that the government becomes able to mitigate the scenario.
Review of the Selected Article
Australia has always been identified among the most mineral rich countries throughout
the world and as per the data almost 2.2% of the total mineral trading across the world is
performed by Australia alone (Risbey, 2016). The selected article stated that the mining boom of
Australia was over by the end of 2006 because of a sharp decline in the demand for iron ore in
the international market. In addition to this the emergence of competitor like India and China
have also adversely affected the Australian mining industry. The overall situation of Australian

ECONOMICS ASSIGNMENT 3
economy worsened further when the global financial crisis set in during 2008. However, soon
after this the Australian mining industry started recovery while producing substantial output by
the end of 2010. According to the article it can be stated that this radical change in the mining
industry of Australia is mainly ushered by the tech metals which is now being widely demanded
by numerous countries across the world.
Issue of Stakeholders
As the article points out that the mining industry of Australia had experienced a major
boom during 2006. Though as soon as the boom was over the mining industry experienced a
sharp decline in the demand for the mining products (Bakker and Shepherd, 2017). It has already
been mentioned that the Australian mining industry plays a crucial role in creating substantial job
opportunities for the skilled, semi-skilled and unskilled workers. A major decline in the demand
for the mining products coupled with the lower productivity gave rise to an extensive increase in
the rate of unemployment specifically in the context of the semi-skilled and unskilled workers
(Mason et al., 2014). It has also been observed that the skilled labors are being exploited as the
industry is appointing these people offering a lower salary package while the demand for the
Australian mining products is low in the international market. However, researchers are
expecting that another boom is approaching in the mining industry of Australia which will
contribute towards the creation of substantial job opportunities and at the same time will help to
eradicate the exploitation of the skilled labor as well. Although, it is expected that the situation
for the unskilled labor will not change (Ivanova, 2014).
Interpretation of the Article
While the world economy was striving to get recovered from the global financial crisis
during 2008, the Australian mining industry provided the necessary support through its

Q3
P4
P3
P1
P2
E4
D2
Q1 Q4Q2
E3
3
E2
S1
D1
E1
S0
D0
ECONOMICS ASSIGNMENT 4
significant contribution of 54% towards the total GDP (Nichols et al., 2016). Australia presently
exports mineral worth of $139 billion worldwide and it used to export more during the time
period 2003-2006 when the demand for the mining products was significantly high. This in turn
helped the mining industry to recruit more of the workers and thereby proceed towards the better
infrastructural framework.
Figure 1: Demand Supply Diagram
(Source: Created by Author)
The presence of human resource has contributed significantly towards a cyclical growth
in the productivity of the Australian mining industry. Primarily the wage rate increased from P1
to P3 due to the increase in productivity. However, when the demand for the mining products
declined and the wage rate remained the same the price of mining products increased which
further contributed towards a reduction in the demand. As demand decreased to D1 from D0.
This in turn shifts the supply curve towards the left and the industry achieved its equilibrium at

ECONOMICS ASSIGNMENT 5
the point E4 where the demand is high at higher price and it can be expected that this will bring
about developments in the mining industry of Australia.
Recommendations
The key issue which can be observed in the context of the Australian mining industry is
that this particular industry is very less exposed towards the world. Moreover, the demand for the
Australian mining products was also decreased in the world market because of the emergence of
the developing nations which were providing the same quality products at a much affordable
price (Grant et al., 2016). Henceforth it can be recommended to the Australian government to
enact certain export policy especially in the case of this mining industry. On the other hand, the
government should also ensure there is adequate supply of skilled labor through providing
appropriate training and development program to them.
Conclusion
On a concluding note it can be stated that the assignment has successfully explained the
newspaper article regarding the Australian mining industry. The entire problem has been stated
and afterwards been evaluated in the light of economic theories. It has been observed that the
Australian mining industry is soon going to face another mining boom. Therefore the
government should implement sufficient infrastructural framework and ensure adequate supply
of skilled workforce to exploit the opportunities of the boom.

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Reference List
Bakker, R.M. and Shepherd, D.A., 2017. Pull the plug or take the plunge: Multiple opportunities
and the speed of venturing decisions in the Australian mining industry. Academy of Management
Journal, 60(1), pp.130-155.
Fleming, D.A. and Measham, T.G., 2015. Local economic impacts of an unconventional energy
boom: the coal seam gas industry in Australia. Australian Journal of Agricultural and Resource
Economics, 59(1), pp.78-94.
Grant, C., Loch, R., McCaffrey, N., Anstee, S. and Doley, D., 2016. Mine rehabilitation: leading
practice sustainable development program for the mining industry.
Ivanova, G., 2014. The mining industry in Queensland, Australia: Some regional development
issues. Resources Policy, 39, pp.101-114.
Mason, C.M., Paxton, G., Parsons, R., Parr, J.M. and Moffat, K., 2014. “For the benefit of
Australians”: Exploring national expectations of the mining industry. Resources Policy, 41, pp.1-
8.
McHugh, B. 2018. Why the next mining boom will be driven by tech metals. [online] ABC Rural.
Available at: http://www.abc.net.au/news/rural/2017-04-17/next-mining-boom-in-australia-is-
tech-metals/8443172 [Accessed 25 Apr. 2018].
Nichols, O., Coleman, M., Jones, D.R., Unger, C.J., Donato, D., Pattenden, C., Smith, R.,
Waggitt, P., Williams, D., Erskine, P. and Brown, G., 2016. Evaluating performance: Monitoring
and auditing: Leading Practice Sustainable Development Program for the Mining Industry.

ECONOMICS ASSIGNMENT 7
Risbey, D., 2016. Breaking down the barriers to rehabilitation success in the Pilbara region of
Western Australia. AusIMM Bulletin, (Oct 2016), p.46.