Economic and International Trade in Australia

Categories: Natural Resources


The mining sector is interested in processing valuable minerals and other natural resources. The minerals extracted are converted into a mineralized shape that provides the prospector or miner with an economic benefit. Mining has great impact on economic of many countries. There are four main mining segments which are divided on the bases of resources they produce: gas and oil mining, coal mining, metal ore mining and non-metallic mineral mining. Developing economies are now major players in the manufacture and production of main resources such as copper (70%), bauxite (40%), iron ore, and precious metals.

Mining can impact in both ways positive and negative. In Australia the mining industry has been the most significant contributor in economy since mid 19th century. The Australian economy is facing a some of challenges. The growth of Australian economy is slowing but nearly 14 percent of increase has been seen in economy growth over the last decade because mining industry has been the largest contributor in it.

In remote and regional areas mining industry employs about 229,999 people and also an increase in export income is expected in the year to June 2019. It is one of the most productive resources industries in the world and also in technology innovation this industry is a global leader which is why this industry is able to deliver these benefits.
Market structure and degree of competitiveness
A number of characteristics defines the mining industry. Mining industry is a perfect competition because it has many sellers and buyers and free market entry. Both sellers and buyers are the price takers.

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The goods offered by the various sellers are largely the same. In fiscal year 2018, the mining industry contributed more than 148 billion Australian dollars to Australian economic growth and also over 132,000 people were employed in Australian mining industry. The mining sector's real gross value added constitutes about 6.4 percent of Australia's total gross value added and is one of the nation's largest suppliers in terms of sectors. Growth in the industry has largely been driven by increased mining exports.
Energy and mineral commodities have increased since the start of the mining boom in 2001 by 394% and these are largest source of export revenue. Mineral resources were accounted by 55 % of Australia’s total export revenues. Prices of raw materials was increased in 2018 following the severe downturn in 2015-2016, but they were stayed below the highest levels of the price. As compared to the highest level of raw materials price cycle in 2012, now days Australia is making great volumes of its main mineral exports.
Thanks to strong growth in oil and gas (55.1%) and non-metallic minerals (40.8%) exports, mining export prices increased by 12.7% in the year to October 2018. New options were born from Australia's position in lithium mining, taking the title of Chile's largest producer worldwide, generating 18,700 tonnes of lithium in 2017. AngloGold Ashanti Limited, Northern Star Resources Limited, and IIuka Resources Limited are among Australia's highest-capitalization mining companies. In the world Australia is one of the biggest exporter of iron, gas, bauxite, coal and aluminium and also other resources. Out of the nearly 81 million metric tonnes of bauxite produced, over 23 million tonnes of bauxite had been exported from Australia. Coal generation in Australia exceeded more than 300 million metric tonnes of oil equivalent in 2018 while in Australia only about 44 million metric tonnes of oil equivalent were absorbed in the same year. According to latest news, Australian mining competitiveness needs investment in structural and size. The Department of Industry, Innovation and Science has assessed that coal miners can have a significant impact on their overall productivity if they overcome systemic weaknesses by investing in operating systems and increasing the size of their operations. Australia is unable to mine and competitively process the coal despite of having large metallurgical and thermal coal operations of high quality. This is a very weak point for the mining industry and if it is not solved appropriately and quickly then it can be a major problem for overall world export market share. The report says “many mines are operating close to the breakeven point”. Despite the fragile nature of coal prices, Australia's coal industry's productivity can be moving rapidly. Scenario analysis indicates that a decrease in coal price of just 15 per cent would see 49 per cent of mines operating with negative margins, based on the cost of 2015. Particularly in comparison to the group of peers Australia has very large mining and coal processing prices. The industry now faces the much tougher challenge of confronting the systemic issues leading to Australia's weak competitiveness in terms of cost. If tackled as a main concern, Australia's large-cost and low-margin mines will be obliged to close unnecessarily. Workforce is a key systemic factor that contributes to the high costs of mining and preparing coal for the nation. While wages are high in Australia, the productivity of labour is also high, calculated as marketable tonnes of goods per employee. For instance, by researching and considering remote operations as well as driverless trucks used in the metal mining industry, Australia will invest further in the increased use of technology and automation in mining activities. This will contribute to further gains in productivity, compensating for the employment costs not competitive to increase overall profitability. The potential of Australia's trade-based coal industry to generate high quality coal at a large scale is crucial for competitiveness. The Queensland and New South Wales metallurgical and thermal resources are among the largest and most quality reserves in the world. To understand the connection between coal and Australia we can see in Queensland. Queensland government is facing problem to balance the need to create job and their commitment to protect the environment as people are preparing to go to the polls for federal election.



  • Allday, A “Mining in Australia”, IBISWorld, Oct 2018

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Economic and International Trade in Australia. (2021, Oct 31). Retrieved from

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