Mining industry contribution to the Australian economy
Mining is a leading industry in the Australian economy. It is Australia’s largest source of export revenue, a key employer in regional areas and a world leader in innovation. According to the Australian Bureau of Statistics (ABS), mining accounted for 6 per cent of GDP in 2016-17 making it the fourth largest contributor to the Australian economy. When the broader economic contribution of the mining equipment, technology and services (METS) sector is included, this share of the Australian economy increases to over 15 per cent.
In 2016-17 resources exports were a record high of $198 billion and accounted for 54 per cent of Australia’s total export revenues. As shown in Chart 2, commodity prices rebounded in 2016-17 but remained well below the highest levels of the price phase of the mining boom. The surge in Australia’s resources export revenue was instead driven mainly by higher production of key mineral and energy commodities.
Compared to the peak of the commodity price cycle in 2011-12, Australia is now producing significantly higher volumes of its key mineral exports. The transition to the production stage of the mining boom comes after a period of significant investment in the mining industry in which over $400 billion of mining, energy and infrastructure projects were developed in Australia. This investment has led to production increases over the last five years of 73 per cent for iron ore, 20 per cent for coal, 16 per cent for bauxite and 13 per cent for gold.
Investment has also occurred in mines that are producing the materials used in modern technologies such as electronics, renewable energy systems and electric vehicles. As a result, Australia is already the world’s largest lithium producer and one of the only countries in the world to produce rare earth elements.
The mining industry has continued to be a large employer in the production phase of the boom. According to Australia Bureau of Statistics the mining industry workforce was approximately 230,000 throughout 2016-17 and many of these jobs are located in regional areas.11 When the broader METS supply chain is considered, this workforce exceeds 1.1 million people and accounts for 10 per cent of jobs in Australia.
While the benefits of mining and METS activities are distributed across Australia, there are a number of regional areas where the sector makes a particularly significant economic contribution:
• The Pilbara region (WA), with a total economic contribution of $37.8 billion (88 per cent of total regional economic activity) and 93,800 jobs (direct and indirect)
• The Bowen-Surat region (Queensland), with a total economic contribution of $18.6 billion (63 per cent of total regional economic activity) and 99,700 jobs (direct and indirect)
• The Hunter region (NSW), with a total economic contribution of $15.2 billion (34 per cent of total regional economic activity) and 93,600 jobs (direct and indirect).
In addition, Deloitte Access Economics has estimated the total economic contribution of mining andMETS to Victoria, South Australia and the Northern Territory in 2015-16:
• Victoria – $13.6 billion in value added (4 per cent of total state activity) and 121,700 jobs
• South Australia – $8.9 billion in value added (8 per cent of total state activity) and 69,800 jobs
• Northern Territory – $3.2 billion (10 per cent of total Territory activity) and 23,500 jobs.
Read the full MCA Pre-Budget submission 2018-19.pdf here.