Group Report: Economic Analysis of the Mining Industry in Australia

This report provides a comprehensive economic analysis of the mining industry in Australia. It begins with an overview of the industry's contribution to the Australian GDP and its significant export performance. The report then delves into the industry's historical background, key products such as natural gas, thermal coal, iron ore, and gold, and its oligopolistic market structure dominated by major companies. A key section examines the resource boom from 2003 to 2016, driven by increased demand from China and other Asian countries, and its positive impacts on GDP and per capita income. The report also addresses the problems the industry faces, including declining yields, increased production costs, and government restrictions. It analyzes the impact of these issues on the Australian economy, including declines in GDP, export income, and employment. Finally, the report suggests potential government interventions, such as adopting new technologies and promoting the construction industry, to mitigate the challenges and improve the economic outcomes of the mining sector. References are provided to support the analysis.

MINING INDUSTRY IN
AUSTRALIA

Importance Of Mining Industry In
Australia
• Mining Industry contributes around 7% to the GDP of
Australia
• Around 60% of the production of mining industry are
exported to other countries
• The industry employs around 0.2 million people making it
one of the largest employer in Australia
• In 2018, $248 billion worth of mining products were
exported, which was 72% of the total exports (Global
Mining Review 2019)

Details Of Mining Industry
• It is one of the oldest industry in Australia that started in
mid-19th century
• The major products of the industry are natural gas, thermal
coal, iron ore and gold
• The industry is dominated by few major companies such as
Rio Tinto, BHP Billiton, UGM Australia and Evolution Mining
• The industry features an oligopoly market structure

Resource Boom In Australian Mining
Industry
• The resource boom in Australian mining industry occurred
during 2003-2016
• It occurred due to sudden rise in demand for mining
products in China and other Asian countries supported by
growth in construction industry
• During this investment in mining industry grew to 8.5%
from 3.5% of the country’s GDP
• Per capita income rose by 13% (rba.gov.au 2014)

Problems Affecting The Industry
• In recent times, after 2016, the industry is facing natural
and economic problems
• Yield of existing mines are lowering and cost of production
has increased
• Excavation for new mines are restricted by the government
• Export demand for mining products is declining
• Less number of people are interest in employment in
mining industry

Impact On Australian Economy
• GDP and export income of Australia declines
• Increase in unemployment rate
• Decline in income of people and thereby fall in standard of
living
• Total economic output of the country declines
• A situation of economic stagnation occurs

Government Intervention
• Importing new and improved mining technology would
reduce the extraction cost
• Lenient policy for excavation will help the companies to
discover more mining fields
• Promoting construction industry would increase the
demand for mining products
• With increased output and profit in mining industry the
economy of Australia make significant gains

References
Global Mining Review (2019). Australia’s mining industry set
export record in 2018. [online] Global Mining Review.
Available at: https://www.globalminingreview.com/trade-
transport/05022019/australias-mining-industry-set-export-
record-in-2018/ [Accessed 5 Aug. 2019].
Rba.gov.au (2019). The Effect of the Mining Boom on the
Australian Economy. [online] Rba.gov.au. Available at:
https://www.rba.gov.au/publications/bulletin/2014/dec/pdf/bu
-1214-3.pdf [Accessed 5 Aug. 2019].

Thank You