Mining Industry in Australia

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What the industry is all about

Mining refers to the extraction of valuable minerals from the earth’s surface with the aim of earning a form of revenue from the sale or use of the mineral materials. Mining involves removal of the waste materials that are of no interest to the miners before extracting the valuable material that is of higher value than the waste material. The process of removing waste material and separating it from the valuable mineral can be referred to as mining. This process continues until the valuable material is extracted and valued. The removal of the waste material has been always a cost to the mining company. Basing on the location of the mineral, the cost could go higher. Nonetheless, the value of the whole mining process should be lower than the total value of the mineral deposit. The value of the mined product should fetch favorable prices on the market so as to cater for the wages of miners and other stakeholders in the mining industry. Some of the minerals mined in Australia include metals, oil, gemstone, coal, limestone, rock salt, gravel, gold, clay, dimension stones, and natural gas among many other minerals. Mining is one of the critical determinants of the economy of the country through the provision of raw materials. In addition, the mining sector also employs a large number of the population either directly or indirectly (Australia, 1996).

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The aim of the analysis

This paper aims at examining the mining industry in Australia.

Major findings/highlights

Mining is an economic activity and thus the exercise should have an economic value. Therefore, the business of mining is profitable to the mining company. Thus, mining should be profitable in order to cater for the purchase and maintenance of mining machinery. Mining in Australia is a major contributor to the GDP as it accounts for more than 10% of the country’s earnings. The government has been in full support of the industry through licensing local and international companies to undertake mineral exploration in the expansive country. The mining industry has played a major role in the demand and supply of various goods and services within the country’s economy.

Major recommendations

  1. The mining companies should acquire a mining license from the government of a certain country.
  2. The mining industry should be well managed in order to continue sustaining the country’s economy.
  3. Proper regulation of the industry is important to the country and the world at large.

Industry analysis

The mining industry in Australia has been rated among the major contributors to the national economy in the country, where minerals like oil are considered to account for more than half of the country’s exports. For example, there are states such as the Western Australia state where petroleum products accounted for a considerable amount of the state’s income between the years 2008 and 2009. The state is known to have more than 64 operating oil mining companies that specialize in oil exploration and mining. In addition, the state has more than 893 mining companies that are involved in other minerals. Furthermore, the Western Australia state has invested in the mining of gold and iron ore where the prices are very favorable to the local and international market. As of 2009, iron ore accounted for more than 46% of the state’s income. Therefore, the country is very rich in minerals that have helped the country to strive for economic growth and development (Oleynik, 2005).

The mining industry has been a major booster of the economy through earning the government considerable revenue. This has been achieved through licensing and creating job opportunities for the Australian people. The states have been able to develop their infrastructure. This has led to the expansion of roads that have facilitated the transport of the minerals from the field to the processing plants and later in the market where they are able to fetch good prices. The earning from minerals fell during the global financial crisis in 2009 when major markets around the globe collapsed. In this case, the prices of major products in the world were affected by this crisis. However, over the past few years, the industry has been able to recover and post good results that are promising to the economy of the country. The mining industry in Australia has been very instrumental in running the country’s economy. Therefore, major investment has been undertaken over the years due to the profitability in the mining industry (Noakes & Lanz, 1993).

According to the Bureau of Resources and Energy Economics of Australia, the country recorded a rise in investment within the mining industry due to the promising feature the country energy offers. As a result, many jobs have been created, and many more are coming up. Thus, the mining industry as an economic sector is very useful in increasing the Australian GDP. The country earned $260.8 billion from the sale of its minerals within the local and international market. The sector has experienced enormous growth, with a lot of capital being invested in the industry to explore new minerals and commercialize the already existing ones. Some of the mining companies within the country specialize in the exploration and extraction of minerals like oil and gas. Others specialize in the extraction of coal and iron ore, which are found majorly in all states (Australian Bureau of Statistics, 1993).

Mining production

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The industry varies from state to state in the country, mostly due to the availability and type of minerals found in each state. In the Western Australian state, the industry has been a major contributor to the economy, where it accounts for more than 20% of the state’s income. Its contribution to the budget of the state is paramount, and thus its importance is seen in the various projects its plays. The state of Queensland earns over 14% in revenue from the mining sector, and thus the economy of the state highly depends on the industry income. On the other hand, the Northern Territory state has been relying on the mining industry income to run its operations. The contribution from mining in the state accounts for more than 20% of the revenue earned. As noted, the mining industry has been a major contributor to the national economy in the country due to its diverse services and goods it offers to the market. (Elford & Mckeown, 1947).

Mining Industry Contribution to State Production

Some of the major mining companies that operate in Australia include BHP Billiton, Fortescue Metals Group, Hancock Prospecting, Yancoal, Rio Tinto, Newmont, and Oz-minerals, among others. Most of these companies deal with the mining of oil, coal, gold, and other major minerals. For example, BHP Billiton deals with minerals like aluminum, copper, iron ore, manganese, and energy coal, among others. The company has managed to employ at least 100,000 people in the country. This reveals how important the mining industry is to the citizen of Australia. The workers are employed in various departments of the company, such as exploration, machine operation, mining, field officers, and managers. It is through such companies that the government can tackle environmental and global problems through control of the mining operations. Problems of pollution and environmental degradation can be followed up by government agencies, and thus protection of the environment is enhanced (Richmond, 1983).

There are different forces in play within this industry. They include the role of the Australian government in the control of mining activity within the country. The government controls the industry through licensing and issuing of trade licenses to local and multinational companies that wish to undertake mining activities in the country. The government has a major role in the control of mining activities. This is meant to control the degradation of the soils and other natural forces in the country. The environment has to be protected from dumping by mining companies who may only be profit-minded and fail to protect the environment. The government controls and monitors these companies’ activities through the issue of guidelines that are to be followed by all registered mining companies. The government recognizes that the mining industry within Australia is a major player in its economy. Thus, any failure in the mining industry is detrimental to the economy. In this case, government agencies like the minerals tertiary education council monitor the operations of mining companies in the country. The minerals councils in Australia monitor each mining company in the country. This is meant to protect the environment against the dumping of waste materials by these companies on the environment (Cleary, 2012).

The mining industry experiences few threats in the country and thus has been able to strive to higher levels through the national stimulus package offered by the government. The oil and petroleum mining industry is very sensitive to global prices of oil, which keep fluctuating. Thus, the demand and supply of oil in the country determines the price of the commodity. The government controls the over-exploitation of natural resources through licensing qualified companies that are environmentally friendly in their mining process. The government sets a threshold that should be met by mining companies that wish to explore minerals in the country (Sutherland & Webb, 2000).

Therefore, the mining industry in Australia has been growing tremendously, and this has been the success story behind the economy of the country. This has been facilitated through investments from local and international investors who observe the country’s potential in minerals keenly. The country has rich deposits of major minerals, and thus it is able to explore and exploit different kinds of minerals with an economic value to the country. For the country to realize its full potential in the mining industry, the government and other stakeholders should offer competitive policies that are geared towards improving the state of affairs in the sector. Through improved infrastructure, the country’s mining industry can grow as the movement of raw materials and other machinery is quickened through better transport and communication systems (Duffy, 1994).

Strategic recommendations

The government should eradicate all the cartels in the industry so that investors can enter the business. In addition, the government should invest in improving the infrastructure as this will lead to an improvement in the delivery of service to and from mining fields. This is due to the role that the mining industry plays in the growth of the Australian economy. The movement of miners and other people who are involved directly or indirectly in the industry is facilitated by the construction of road and railway systems. The raw materials are transported effectively through an improved transport and communication system. Better and broad economic policies should be utilized in the industry in order to acquire enhanced growth and better sustainable employment levels for the country’s population, either directly or indirectly. Over the years, the Australian mineral industry has demonstrated growth. Its capacity to expand and perform better in the international market and more resources should be utilized to enhance the industry’s performance. The future of the mining industry will depend on how the government will carry out its fiscal and monetary policies that will regulate the industry (Publishing, 2002).

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The government’s role in the minerals sector is paramount, and thus its control will help the industry survive in the next few years. This will also enhance how the industry will compete favorably with other industrialized countries and states. The level of inflation will affect both the local and international prices of minerals produced in the country. This will affect the local industry that relies on these raw materials. How the industrial production will compete with other countries will mostly depend on the strategic plans set by the industry stakeholders with the help of the government. For sustainable growth in the various economic sectors of the country, the mining industry is one of the boosters of this growth. Thus, the government always has a role to play to control the mining activities in the country.

Economic factors such as inflation should be checked to control the pricing of various minerals on the local and international markets. The value of the Australian currency is determined by the level of export and international trade. This helps the country earn foreign exchange throughout the year, thus stabilizing the country’s economy. Fiscal policies are also affected by the level of the mineral trade, either locally or even on the international market. The labor force in the country is also influenced by the mining industry as many of the country’s population are involved directly or indirectly in the mining industry. The mining industry offers employment to millions of people, and thus the mining industry is a major economic activity in the country’s progress to industrialization. The mining industry provides a large quantity of the raw material that helps the country’s industry to run and operate well without any hitches and upsurging prices of major raw materials (The International Labor Organization, 2002).

The minerals industry in Australia has had steady growth, mostly due to the modernization of most of its projects. In this case, modern exploration methods that use better tools and techniques are being applied. This has helped to increase the productivity of the mining industry, where better methods of mining are being used. Thus, the cost is lowered due to better efficiency in operations. The mining companies incur fewer costs and thus are able to maximize the income earned from selling the processed minerals. Proper training of people has increased their efficiency in the mining operations. This has helped mining companies to increase their productivity over the years. The mined products are mostly processed in the country. This has helped to reduce the level of unemployment by creating jobs for the country’s population (Hunt, 2009).

It’s through the creation of jobs in the country that the country’s economy is able to steer into economic growth. This is through improvement in the fiscal and monetary policy of the country. The creation of new industries that help process the already mined minerals has created jobs for the population where newly graduated students are being enrolled in the mining industry. This helps the country improve on the GDP and initial national output. The economy of Australia is among the most stable in the world due to well managed fiscal and monetary policies. The government has been earning high revenue from licensing mining companies and through the sale of the already mined products. Through these revenue collections, the government has been able to improve other social amenities for the citizens of the country. Such amenities include improvement in the infrastructure and health facilities, thus leading to economic development (Mulligan, 1900).

For the country to achieve its macroeconomic status, all sectors of the economy should be inclined to achieving a greater goal to enhance the economic power of the country through the stimulus program initiated by the government. The mining companies should protect the environment and other natural resources. Through the mechanization of mining projects in the country, the mining companies have been able to reduce the level of pollution to the environment. Through the protection of the environment, the living condition of workers and other citizens in the country is improved. Thus, the mining companies usually undertake corporate social responsibility projects in all areas they operate as a means of giving back to the community (Organization for Economic Co-Operation and Development & Sourceoecd (Online Service), 1999).


The mining industry in Australia has seen and experienced enormous growth over the last few years. This is being driven by the fact that minerals form a major part of the revenue source for the country through the sale and provision of employment opportunities. The country’s reliance on mining and exploration of minerals has been improved through major investment opportunities that are geared towards improving the state of the country’s economy. The importance of mining in the country is well profound through the different involvement that the government is undertaking to ensure that the prospects of mining are profitable. Minerals are used as raw materials for the local industry.

Thus, the importation of raw materials is lowered through mining. This is regarded as a cost-saving benefit to the country and the region at large. The country has a rich deposit of a variety of minerals that include oil, aluminum, iron ore, manganese, gold, copper, and silver, among many others. The country boasts of having established mining companies that can compete favorably with others on the global market. The government of Australia has been at the forefront to monitor the operations of each mining company. This is meant to make sure that these companies follow the given guideline by the Minerals Council of Australia for better sustainability in all its fields. The government is able to improve the state of infrastructure in the country through revenue collection. The mining industry in Australia has helped to boost the economy of Australia. Therefore, it is a major contributor to national growth, and thus proper control and monitor are important..

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Reference List

Australia 1927, Interim report relating to the gold-mining industry of Western Australia: (1) Kalgoorlie, (2) Gwalia, with appendices, H.J. Green, Govt. Printer, Melbourne.

Australia 1996, Mineral exploration and mining in Australia, A.G.P.S., Canberra.

Australian Bureau Of Statistics 1993, Introducing the Australian and New Zealand standard industrial classification (ANZSIC) 1993, Australian Bureau of Statistics. Canberra.

Cleary, P 2012, Mine-field: the dark side of Australia’s resource rush, Black Inc, Collingwood, Vic.

Duffy, M 1994, The contribution of mining to Australia’s development, International Council on Metals and the Environment, Ottawa.

Elford, HS & Mckeown, MR 1947, Coal mining in Australia, Tait Pub. Co., Melbourne.

Hunt, MW 2009, Mining law in Western Australia, Federation Press, Sydney.

Mulligan, DR 1900, Environmental management in the Australian minerals and energy industries: principles and practices, Univ. of New South Wales Press, Sydney, Australia.

Noakes, M & Lanz, T 1993, Cost estimation handbook for the Australian mining industry, Australasian Institute of Mining and Metallurgy, Parkville, Vic.

Oleynik, IS 2005, Australia: mineral & mining sector investment and business guide, International Business Publications, Washington, DC.

Organisation for Economic Co-Operation and Development & Sourceoecd (Online Service) 1999, Indicators of industrial activity sources and methods, quantitative indicators, Organisation for Economic Co-operation and Development, Paris.

Publishing, O 2002, Industry, Retail and Construction Indicators, Volume 2002 Supplement 1, Organisation for Economic Co-operation and Development, Paris.

Richmond, WH 1983, Mining and Australia, Univ. of Queensland Pr., St. Lucia.

Sutherland, L & Webb, G 2000, Nature guide to gemstones & minerals of Australia, Reed, Chatswood, N.S.W.

The International Labour Organization 2002, The evolution of employment, working time and training in the mining industry: Report for discussion at the Tripartite Meeting on the Evolution of Employment, Working Time and Training in the Mining Industry, ILO, Geneva.

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