HI5003 Economics for Business: Australian Mining Industry Report 2018

This report analyzes the Australian mining industry, focusing on its fluctuating demand and the impact of tech-metals. It reviews a newspaper article highlighting a potential mining boom driven by these tech-metals and uses economic theories to interpret the industry's current state. The report identifies affected stakeholders, including skilled and unskilled labor, and offers recommendations such as vocational training programs and export promotion strategies to realign the situation and capitalize on the coming boom. It concludes that with strategic adjustments, the Australian mining industry is poised for significant growth and can overcome challenges related to international competition and labor skills.

Running head: ECNOMICS FOR BUSINESS
Economics for business
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Executive summary:
Australian mining industry is one of the essential sector for the country’s economy and since
a long time it has been facing growth. However, recently it has been seen that there is
reduced demand for the Australian mining products in the world market. Recently due to
presence of tech-metals in the Australian economy, demand has again started to rise. This
report was aimed to analyze the selected newspaper report with the various economic theories
and trace the changing scenario of the Australian mining industry. In addition to this through
analysis it has tried to find the affected stakeholders and will provide recommendation to
gauge the situation. From the analysis of the selected article it can be found that the
Australian mining industry has been facing tough competition from the international players
since a 2006 and it has reduced the demand of the Australian mining products in international
products. However, recent production of the tech-metals from the Australian mines, the
report argues that it is going to provide much needed boost to the Australian mining industry
as well as stimulus to the economic growth of the nation.

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Table of Contents
Introduction:........................................................................................................................................3
Review of the selected article:.............................................................................................................3
Affected stakeholders’ issues:.............................................................................................................4
Interpretation of the case with economic theories:...........................................................................4
Recommendations to realign the situation:.......................................................................................5
Conclusion:..........................................................................................................................................6
Reference:............................................................................................................................................7

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Introduction:
Over the year share of mining industry in Australian Gross Domestic Product (GDP)
has increased substantially leading it to become one of the key sector in Australia for
economic growth (Dwyer et al. 2016). However, during 2006, it has been seen that there
were certain amount of drop in the demand of the Australian mining products in the world
market that has forced the revenue from mining industry to fall by a large extent (Fleming
and Measham 2015). After almost a decade, the economy is yet to face another mining boom
due to production of the tech metals from the Australian mines. According to the newspaper
report published in ABC news with the headline “Next mining boom in Australia will be
driven by tech metals for renewable energy and technologies” that highlights next mining
boom in Australia will come from the tech-metals (McHugh 2017). This report is aimed to
analyze the selected newspaper report with the various economic theories and trace the
changing scenario of the Australian mining industry. In addition to this through analysis it
will try to find the affected stakeholders and will provide recommendation to gauge the
situation.
Review of the selected article:
There is no doubt that Australian mining industry is one of the essential industry of the
country’s economy and it produces job for skilled, semi-skilled and unskilled labors. Since
2003, mining industry of Australia has become one of the sector that has been facing rapid
growth (McHugh 2017). However, according to the selected article due to fall in the demand
of the Australian mining products in the international market, revenue started to fall sharply
by the end of the year 2006 (Downes, Hanslow and Tulip 2014). In addition to this the
selected article also highlights that rise in presence of the Asian countries like china and India
who sell their mining product at comparatively lower price were enjoying price advantage
over the Australian mining goods. Thus the demand fell and it lead to unemployment as well

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as the fall in the GDP of the economy. However, recently it has been observed that mines of
the Australia has tech-metals available, which is about to provide another mining boom to the
Australian mines in coming days. Moreover the selected article highlights that though there
were rapid reduction in the demand of the Australian mining product in the international
market due to Global Financial Crisis in 2008, in coming day tech-metals is going to provide
another boom like 2003 to the Australian mining industry (Syed et al. 2015).
Affected stakeholders’ issues:
Over the year Australian mining industry has shared 2.2% of national GDP, however
it has faced reduced holdings due to fall in the demand from the international market (Bayari
2016). Due to fall in the demand of the Australian mining products in the international
market, not only the workers in addition to this mine owners has also suffered a lot. More
than half of the semi-skilled and almost all the unskilled labors has lost their jobs; when it
comes to the skilled labors, then it can be seen that they used to get reduced wage and high
scope of future growth (Bice 2014). In the present scenario, skilled labor and semi-skilled
labors are getting employment due to another boom in the Australian mining industry;
however unskilled human resource has been falling apart from the competition.
Interpretation of the case with economic theories:
Present scenario of the Australian mining industry can be describes with the help of
demand and supply framework easily. According to the figure 1 it can be seen that initial
equilibrium occurs at E1, where the price is P1 and the quantity demanded is Q1. However,
presently as there is fall in demand, then the demand curve has shifted leftward to D1
position; where the price is lower than the initial price P1 (Elshkaki et al. 2016). Contrary to
this, if there is rise in the demand of the Australian mining product in the international
market, then it would shift the demand curve to the D2, position; where the economy will
enjoy higher price P3. Now, it is obvious that if there is shift in the supply due to rise in the

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production of the tech-metals, then it would influence the demand to move upward, leading to
rise in the price as well as demand of the Australian mining demand too (Fry et al. 2016).
Figure 1: supply and demand model of the Australian mining industry
Source: (Created by Author)
Recommendations to realign the situation:
There are various drawbacks in the Australian mining industry and if the economy wants
to grab the coming opportunity in the form of mining boom, then the economy need to go
through various transformation. Recommendations to adhere the coming boom in the
economy are as follows:
1) Firstly, it is necessary for the government to introduce vocational training program for
the labors in order to enhance the skill of the employers to convert them into human
capital
2) Secondly, it would be ideal for the government to utilize export promotion programs
and use optimal resource allocation technique so that it can reduce the cost of
operation

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3) Thirdly, Australian mining industry face tough competition from the international
competitors, thus it would be ideal for the industry to enhance the reduce minimum
wage rate depending upon the region of operation so that price of final output gets
reduced
Conclusion:
The report has been made in order to understand the selected article with the various
economic theories. From the analysis of the selected article it can be found that the Australian
mining industry has been facing tough competition from the international players since a
2006 and it has reduced the demand of the Australian mining products in international
products. However, recent production of the tech-metals from the Australian mines, the
report argues that it is going to provide much needed boost to the Australian mining industry
as well as stimulus to the economic growth of the nation. The report has found that lack of
skilled labor has hampered the standing of the Australian mining industry during 2006;
however if the local government brings in vocational training centers and educe the workers;
then it would have been much better for the Australian economy. Thus to conclude it can be
stated that Australian economy is going to become one of the largest mining industry in
coming days.

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Reference:
Bayari, C., 2016. Economic geography of the Australian mining industry. Tijdschrift voor
economische en sociale geografie, 107(5), pp.552-566.
Bice, S., 2014. What gives you a social licence? An exploration of the social licence to
operate in the Australian mining industry. Resources, 3(1), pp.62-80.
Downes, P.M., Hanslow, K. and Tulip, P., 2014. The effect of the mining boom on the
Australian economy.
Dwyer, L., Pham, T., Jago, L., Bailey, G. and Marshall, J., 2016. Modeling the impact of
Australia’s mining boom on tourism: a classic case of Dutch disease. Journal of Travel
Research, 55(2), pp.233-245.
Elshkaki, A., Graedel, T.E., Ciacci, L. and Reck, B.K., 2016. Copper demand, supply, and
associated energy use to 2050. Global Environmental Change, 39, pp.305-315.
Fleming, D.A. and Measham, T.G., 2015. Income inequality across Australian regions during
the mining boom: 2001–11. Australian Geographer, 46(2), pp.203-216.
Fry, J., Lenzen, M., Giurco, D. and Pauliuk, S., 2016. An Australian Multi‐Regional Waste
Supply‐Use Framework. Journal of Industrial Ecology, 20(6), pp.1295-1305.
McHugh, B. (2017). 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 11 Apr. 2018].
Syed, A., Grafton, R.Q., Kalirajan, K. and Parham, D., 2015. Multifactor productivity growth
and the Australian mining sector. Australian Journal of Agricultural and Resource
Economics, 59(4), pp.549-570.

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