subject: Some Ideas About Australian Mining [print this page] Overview Overview
The Australian minerals industry is defined as covering the exploration and mining of minerals (including coal) and the associated minerals processing industry. The Mining division is expected to generate revenue of about $178.9 billion in 2010-11, up from $119.6 billion in 2005-06. Revenue is expected to grow by about 19% in 2010-11, having slumped by over 15% in the previous year in response to the global financial crisis. Despite that fall, revenue is expected to rise at an average annual rate of about 8.4% over the five years ending in 2010-11. The division is expected to generate over 7% of Australia's GDP in 2010-11. Moreover, and as described by leading economist Jim ONeill from Goldman Sachs, Australia will be a chief beneficiary a phenomenal $US7.5 trillion expansion over the next decade.
WA is in many ways unique in the Australian business landscape. Due to its obvious mineral resources and vast regions it has widely distributed economic zones ranging from the capital Perth, east through to the goldfields, North West to the vast operations of the Pilbara & Kimberly and South West business markets such as Busselton and Albany.
The sheer scale and number of projects and infrastructure development going forward is impressive. Far from being dependent on one or two commodities WA and its regional economies are the beneficiaries of demand for oil and gas, iron ore, gold, nickel and minerals sands as well as literally dozens of agri products.
Nickel as a case in point hit hard during the GFC-driven downturn looks set to generate increased revenue for several WA regions, including Kambalda. Australia's nickel output is expected to continue falling in 2009-10 to around 144,000 tonnes, as the full-year impact of idled and permanently closed mines takes effect. By 2013-14, Australia's production is expected to be about 186,000 tonnes per year.
What can we conclude from all this macro data? The basic economic premise that capital investment in mining and infrastructure projects leads to what economist refer to as a multiplier effect. The stimulus that this investment brings to both to the immediate region where a project is taking place and the other regions of the State.
At this point in the Australian economic cycle WA is leading the nation into a high growth period and business activity is about to surge state wide. This will attract its fair share of investment and migration across from the under-performing states of Queensland and NSW. Many regions of WA are well positioned to benefit from the states imminent turbo-charged performance. Bottom line is: increased economic activity attracts superior population growth, which in turn leads to more building and retail activity and related services.
