Economic Analysis: Demand and Supply of Mining Resources in Australia

This report provides an economic analysis of the Australian mining industry, focusing on the interplay of demand and supply. The analysis is based on a recent news report discussing the potential for a new mining boom driven by the rising demand for tech metals used in renewable energy and other technologies. The report examines how the industry is affected by supply-side constraints, particularly the shortage of skilled labor. The report uses economic theories, including supply and demand curves, to interpret the market scenario. It also presents graphical representations of demand and supply dynamics. The study identifies stakeholders affected by these trends and offers recommendations for policymakers to address the skills gap and capitalize on the opportunities presented by the growing demand for Australian mining resources. The report concludes by summarizing the key findings and implications for the future of the Australian mining sector.

Running head: DEMAND AND SUPPLY OF MINING RESOURCES IN AUSTRALIA
Demand and Supply of Mining Resources in Australia
Name of the student
Name of the university
Author note

1DEMAND AND SUPPLY OF MINING RESOURCES IN AUSTRALIA
Executive summary:
The report has analyzed a latest newspaper report that describes the Australian mining industry
with the help of economic theories like supply and demand. Analyzing the report it has been
found that, the Australian economy is yet to face another mining industry boom due to rise in
demand of their tech metals. However, supply side constrained originated from the skill gap
among the labors has constrained the growth. The report has mentioned various
recommendations for the Australian economy to grab the opportunity completely and to
conclude the report has provided a brief overview of the case.

2DEMAND AND SUPPLY OF MINING RESOURCES IN AUSTRALIA
Table of Contents
Introduction:....................................................................................................................................3
Review of article:.............................................................................................................................3
Issue of affected stakeholder:..........................................................................................................3
Economic interpretation of the case:...............................................................................................4
Graphical presentation of the economic theories:.......................................................................4
Demand and supply of mining resource in Australia:.................................................................6
Recommendations for the affected policyholders:..........................................................................6
Conclusion:......................................................................................................................................7
Reference:........................................................................................................................................8

3DEMAND AND SUPPLY OF MINING RESOURCES IN AUSTRALIA
Introduction:
Demand and supply are two important tools of economic analysis that aids to describe the
economic performance of an economy (Ahlgren, 2015). With the help of these tools, this essay is
going to analyze the mining industry of Australia. In order to assess the economic performance
of the Australian mining industry a latest newspaper report has been chosen, which was
published in the ABC news with heading of “Next mining boom in Australia will be driven by
tech metals for renewable energy and technologies” few months back. The report argues that the
Australian mining industry has been facing boom in its mining industry again after 2006 and if
the trend continues, then Australian mining industry will become the world market leader in the
industry (McHugh, 2018).
Review of article:
Australia is one of the countries that have highest amount mineral ores (Wiedmann et al.,
2015). Due to rise in mining industry demand, the industry has grown rapidly until 2006.
However, it faced slug during the recession of 2008. The newspaper report portrays that
Australian mining industry enjoys 2.2% of the total produce of world mining industry and with
rise in demand of tech-metals from the Australian mines; it is going to face high demand in
world market (McHugh, 2018). The report also argues that higher demand in the Australian
minerals will enhance the employment state of the country and lead the Australian economy
towards a sustainable economy.
Issue of affected stakeholder:
Australian mining industry was facing growth since 2003, when there was demand of the
Australian minerals in the world market (Dobele et al., 2014). However, with rise in world

4DEMAND AND SUPPLY OF MINING RESOURCES IN AUSTRALIA
economy turmoil, the growth rate started to decrease during 2008 and since 2013, there was an
initiation of boom again. This could have been good news for the Australian economy, however,
the economy has failed to attain desired level of profit and output due to lack of skilled labors
(Zwar et al.,2017). This has affected the mining industry stakeholders and it has constrained the
growth of the economy too.
Economic interpretation of the case:
Demand and supply are two micro economic tools that aid to describe the market
scenario of an economy. The early economists have introduced these basic tools, Alfred
Marshall, through the book ‘Principles of Economics By the theory of supply and demand,
market equilibrium condition can be attained, considering both the supply side factors and the
demand side factors (Canto, Joines & Laffer, 2014). According to the economic theories,
demand refers to the quantity of goods, which is desired by the consumers; whereas supply
denotes amount of good produced by the producers. Price is one of the main factors that can alter
the demand and supply. Depending upon the price elasticity of a good, demand and supply
shocks comes into existence and aids to manipulate the overall market situation (Kachlami,
Yazdanfar & Ohman, 2017).
Graphical presentation of the economic theories:
According to the Alfred Marshal, demand has a negative relation with price, which can
be seen from the figure 1. With rise in rice, there is fall in demand and incase of any fall in price
the demand starts to increase. According to economic theories, there is a positive relation
between the price and the supply of the products. In other words, if there is rise in price, then the
supply will also increase and a fall in price will be depicted by a decrease in the supply too.
Figure 3 and 4, depicts the change in demand and supply respectively due to change in price. The

5DEMAND AND SUPPLY OF MINING RESOURCES IN AUSTRALIA
P1
P
P P
P
Q Q
Q
Q
Q
P1
P2
P2
P
P
Pe
Q1 Q2 Q3 Q1 Q2 Q3
Q1 Q2 Q1 Q2
DD
SS
DD
DD’
DD’’
SS
SS’
SS’’
DD
SS
FIGURE 1 FIGURE 2
FIGURE 3
FIGURE 4
FIGURE 5
E
Qe
changes will continue in the demand and supply, until it reaches to the equilibrium situation as
mentioned in the figure 5.

6DEMAND AND SUPPLY OF MINING RESOURCES IN AUSTRALIA
Figure 1: Demand and Supply graphical representation
Source: (Created by Author)
Demand and supply of mining resource in Australia:
Mining is one of the main source of Australian GDP. Sccording to the statistics of 2008,
mining contributed almost 54% of the total Australian GDP and it was the major source of
employment in the country. Back then, the country was exporting almost $139 billion minerals to
the world market (Bakker & Shepherd, 2017). However, if the situation prior to 2003 can be
considered, then it can be seen that Australian economy was not that productive due to lack of
infrastructure and lack of skilled labors. Post 2003, until 2008, there was boom in Australian
mining industry due to rise in demand for their mining goods in the world market aided by the
higher growth in infrastructure and skill enhancement program for the labors. Presently
Australian economy is facing same kind of growth in their mining industry, due to rise in
production of tech metals (Moffat & Zhang, 2014). Demand elasticity o the mining goods are
high, that has been aiding the mining industry to gather higher price for their production.
Recommendations for the affected policyholders:
From the above analysis, it has been seen that mining of Australia is an important sector
that contributes to the country’s GDP significantly. However, the analysis portrays that lack of
skilled labor is major problem that has constrained the growth of Australian mining industry and
let it fail to grab the opportunity. Thus for the Australian economy, it would be better to
introduce skill enhancement programs for their labor and develop authorities to look into the
employment of the labors in the mining industry in order to maintain industry benchmark.

7DEMAND AND SUPPLY OF MINING RESOURCES IN AUSTRALIA
Conclusion:
Mining industry in Australia is one of the major employment and GDP generating sector
for Australia. With ever-rising demand for tech metals in the world economy, Australian mining
industry is yet to face another boom. Demand of the Australian mining products are rising
worldwide, however the report has found that lack of skill among the labors has constrained the
growth. Thus, the report has mentioned few recommendations, using which Australian economy
can return to a situation like 2003.

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Reference:
Ahlgren, E. O. (2015). Demand load curves–an important tool for assessment of PV deployment
success. 3rd Southern African Solar Energy Conference, South Africa, 11-13 May, 2015.
Bakker, R. M., & 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), 130-155.
Canto, V. A., Joines, D. H., & Laffer, A. B. (2014). Foundations of supply-side economics:
Theory and evidence. Academic Press.
Dobele, A.R., Westberg, K., Steel, M. and Flowers, K., 2014. An examination of corporate social
responsibility implementation and stakeholder engagement: A case study in the
Australian mining industry. Business Strategy and the Environment, 23(3), pp.145-159.
Kachlami, H. M., Yazdanfar, D., & Öhman, P. (2017). Regional demand and supply factors of
social entrepreneurship. International Journal of Entrepreneurial Behaviour & Research.
McHugh, B. (2018). Why the next mining boom will be driven by tech metals. ABC Rural.
Retrieved 19 January 2018, from http://www.abc.net.au/news/rural/2017-04-17/next-
mining-boom-in-australia-is-tech-metals/8443172
Moffat, K., & Zhang, A. (2014). The paths to social licence to operate: An integrative model
explaining community acceptance of mining. Resources Policy, 39, 61-70.
Wiedmann, T. O., Schandl, H., Lenzen, M., Moran, D., Suh, S., West, J., & Kanemoto, K.
(2015). The material footprint of nations. Proceedings of the National Academy of
Sciences, 112(20), 6271-6276.

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Zwar, N., Dennis, S., Griffiths, R., Perkins, D., May, J., Hasan, I., ... & Caplan, G. (2017).
Optimising skill-mix in the primary health care workforce for the care of older
Australians: A systematic review.