HI5003 Economics for Business: South32 Industry and Economic Report

This report analyzes the economics of South32, focusing on the industry background, market structure, and factors influencing demand and supply. The analysis includes the concept of elasticity, particularly in the context of the metallurgical market and geographical trade, emphasizing the competitive position of Australian producers, including South32 (a spun-off of BHP Billiton). The report also examines the impacts of events such as increased thefts and the implementation of security measures, and their effects on production costs and operational efficiency. The conclusion stresses the need for continuous review of production losses, which are influenced by both internal and external factors. The references include South32's communications and societies reports and a study on market structure differences in the Australian iron ore and metallurgical coal industries.

HI5003 – ECONOMICS FOR BUSINESS
SOUTH32
Group : S1-11
Student name : 1. Pham Thai Duy LE (DY21402)
2. Shibu……………
3. Maureen……………

INTRODUCTION
South32 is a ….

INDUSTRY BACKGROUND
……………..

MARKET STRUCTURE
……………..

FACTORS THAT INFLUENCE DEMAND
DOWNSTREAM
RELATED
GOODS

FACTORS THAT INFLUENCE SUPPLY

ELASTICITY
Elasticity measures the change in quantity for a
certain change in price. To analyze the
metallurgical market, it is important to stress
on the market elasticity and geographical
trade (Lawrence and Nehring 2015). The
elasticity to examine the competitive position
of Australian producers.
South 32 is a spun of BHP Billiton which is one
of the oligopolistic market leader in iron ore.
• Elasticity of supply in Australia and high end
producers including BHP Billiton (South 32)
differentiate hemselves from higher quality
products.
• Diagrammatically elasticity of supply can be
affected by change in cost of production.
• The minerals are inelastic as nature due to
less quantity and which induces hike in price

IMPACTS OF THE EVENT
• Production costs of metallurgical ore are lower in Australia for cost
operating operations but the Australian producers like oligopolistic
companies dominates the higher end spectrum.
• Also, as per the metallurgical coal trade, Australia because of the
top oligopolistic companies, remains a top supplier. Although, other
economies like United States and Russia have high export values.
This may increase the production at lower costs.
• The events at South 32 are of grave importance as thefts have
increased and this has led to dissemination of duties.
• Trained teams have been employed to provide security to not only
workers but also the equipment and machines. This will initiate
lower human risk (south32.net 2017).
• As a result, proper operations, controls and implementation of a
management plan is to be taken to mitigate identified risks.

CONCLUSION
To conclude, it can be said that even though the company is a spun of
BHP Billiton, it still the need to review and assess the prduction lost
that not only fluctuate due to external factors but also through
internal factors
On a broad base, operations have been executed keeping in mind the
production costs that has influenced the elasticity of supply in the
long run.

LIST OF REFERENCES
Communications and Scocieties at South32., 2017.
https://www.south32.net/docs/default-source/all-financial-
results/2017-annual-reporting-suite/communities-and-
society-at-south32-(final).pdf?sfvrsn=60733f2b_8
Lawrence, K. and Nehring, M., 2015. Market structure
differences impacting Australian iron ore and metallurgical
coal industries. Minerals, 5(3), pp.473-487.