The mining industry is the powerhouse behind Australia’s economy, accounting for an astounding 13.7% of the Gross Domestic Product (. In December 2022, mining production grew for the third quarter in a row, ; history mining has helped the country through global impacts, including the Global Financial Crisis (GFC)  and the coronavirus pandemic. The mining industry equates to two-thirds of Australia’s merchandise exports and directly employs over a quarter of a million people . While the mining industry has received criticism, the sheer importance of mining to Australia’s economy cannot be denied.
Mining industry economic impacts.
The Mining sector is without question, Australia’s largest export industry. According to trade and investment figures from the past decade, an impressive $2.4 trillion in resources was generated in export revenue . Although most metals and minerals mined here in Australia are exported, the benefits are still retained locally through economic contributions. Australian wages in the mining industry totalled $252 billion, with company taxes generating $143 billion with revenue royalties amounting to $112 billion. The generated revenue was reinvested into the Australian economy through welfare, healthcare, defense, education, and public services. This financial injection yielded significant economic benefits due to the multiplier effect, which is the proportional increase in final income (GDP) that results from an injection of spending. Over the past decade, the Australian economy has grown by 21% due to contributions from the mining industry .
The industry has showcased remarkable strength even amidst the economic turmoil of recent years including the COVID-19 pandemic and the 2007 Global Finacial Crisis (GFC). The Australian Bureau of Statistics released data highlighting an Australian record in export revenue from the natural resources sector in 2021. Export revenue from the mining industry exceeded $351 billion which is a 21% increase from the previous record set in 2019 . Australia achieved its largest-ever trade surplus of $123 billion during the pandemic, demonstrating the immense contribution that mining makes to the nation’s economy.
These figures are a significant indication of Australia’s strength and ability to navigate unpredictable economic situations, highlighting the minerals sector as a powerful component of economic success. Undeniably, mining has yielded financial returns for Australia’s economy and will continue to do so for many years to come.
Investing in the future of Australia.
Australia has the potential to emerge as the global leader in the race to achieve decarbonisation targets, net zero emissions, energy sustainability and environmental protection. It’s estimated that 3.5% of the world’s rare earth and critical minerals are located here in Australia. Positioning Australia globally as a secure, reliable and ethical provider of critical minerals and resources supporting a net zero clean energy transition.
Based on international demand, it’s estimated that the world needs 50 new lithium mines, 60 new nickel mines and 17 new cobalt mines by 2030 alone . Rare earth minerals are vital to produce standard technologies like phones, electric vehicles, solar panels and energy infrastructure. According to Arafura Resources, one of Australia’s leading mining companies, it is estimated that global consumption of rare earth oxides will reach 280,000 tonnes by 2030 . The combination of demand and investment in the critical mineral sector present a significant economic opportunity for Australia to capitalise on this emerging market.
China has dominated the rare earth mineral space, owning almost 40% of the world’s reserves, followed by Vietnam and Brazil. Australia is currently ranked sixth globally for rare earth mineral deposits, with this global map highlighting all available resources and known deposits.
Australia is currently developing a rare earth metal and mineral industry independent of China’s traditionally dominant market. By cultivating relationships with allies, Australia aims to diversify its collection of rare earth minerals as part of the US Inflation Reduction Act, which could lead to high demand and potentially lucrative investment from the US Department of Defense. Australia has recognised potential mining locations that could result in significant economic benefits due from the extraction of rare earth deposits and resources.
Mining contribution to the Australian economy.
The mining industry has had a prominent role in Australia’s economy for decades. The economic contributions generated by this industry are still highly relevant today’s economic outlook. The benefits of Australia’s mining sector reach beyond economic gain, with resources such as precious and rare earth metals play an important part in technological advances and emerging markets.
Australia has a competitive advantage when it comes to extracting rare earth minerals and expanding the renewable sector. Although Australia still faces challenges associated with sustainable mining processes, our continued focus on rare earth minerals will ensure our economy can continue to reap the benefits from mining activities for years to come.
At Minetek, we are dedicated to helping mining operators achieve commercially and environmentally sustainable outcomes, enabling safe, compliant, and profitable operations for the future. Our sustainable technology enables efficiency in the rare earth mineral sector with innovative solutions including air ventilation, water management & sound attenuation. Please contact Minetek today if you are interested in learning more about our mining solutions.
- Department of Industry, Science and Resources – https://www.industry.gov.au/sites/default/files/2022-12/resources-and-energy-quarterly-december-2022.pdf
- Minerals Council of Australia – https://minerals.org.au/policies/trade-and-investment/
- Minerals Council of Australia – https://minerals.org.au/resources/record-high-for-resources-export-revenue/
- Mining – https://mining.com.au/optimistic-outlook-for-mining-in-2023-despite-ongoing-macroeconomic-challenges/
- Mining Technology – https://www.mining-technology.com/features/australia-rare-earth-mines/
- Australian Mining – Critical Minerals Driving Future Growth.
- Australian Bureau of Statistics – https://www.abs.gov.au/articles/12-things-happened-australian-economy-during-last-quarter
- ABC News: https://www.abc.net.au/news/2017-08-30/fact-check-mining-boom-and-the-global-financial-crisis/8849784