Driving the Australian Economy

Since the discovery of mineral deposits in the late 18th century, the Australian economy has flourished as a result of industrial mining, and it has come to be recognized as a world leader in the field.

Australia is the largest exporter of coal in the world, the second highest producer of gold behind China and the third highest supplier of iron. It holds 23% of the world’s uranium reserves, with the Olympic Dam mine near Adelaide being the world’s largest source of uranium (wikipedia.org). In addition to metals, oil and gas, Australia supplies mining technology and services, with their expertise in the field being such that mining companies the world over make use of technology originating in Australia.

According to futureinaustralia.com, the mining industry contributes 5.6% of Australia’s Gross Domestic Product (GDP), compared to 1.6% in the USA and 3.6% in Canada, and it supplies 35% of Australia’s exports. Its importance as a source of revenue and jobs is clear. In truth, Australians represent only 1.3% of the industry’s labor force, with the need to relocate their families being a major deterrent, but mining promotes significant job creation for Australians in the services sector.

Discovery of Resources

Escaped convicts discovered coal in Newcastle as early as 1791, and gold, silver and copper discoveries gradually increased during the mid-1800s.

Though mining was conducted primarily by private companies with little government interference, the New South Wales government began offering rewards for “payable gold” discoveries to encourage gold mining in Australia as opposed to California. A source of payable gold was subsequently discovered at Ophir in New South Wales, and Australia would come to produce 40% of the world’s gold by the 1850s.

Periodic gold rushes brought about population explosions as migrants arrived in waves. Towns were formed around mining locations, supplemented by agricultural and pastoral industries.

Evolution of Australia’s Mining Industry

The mid-twentieth century saw significant growth in Australia’s mining industry with technological advancements and increased profitability, beginning its rise from a collection of mining towns to a world leader in industrial mining. According to the Australian Bureau of Statistics, several factors contributed to this transition:

• Improved methods of conducting geological surveys, allowing explorers to better pinpoint likely sources of minerals. This drastically increased discovery of mineral resources which in turn attracted more mining companies to Australia.
• Discovery of rich petroleum sources in the 1960s.
• Japan seeking to establish themselves as an economic power, with a great demand for coal, iron and aluminum that Australia was able to provide.

Over time mines became less dependent on mining towns, with laborers flying in periodically to conduct shifts lasting several weeks instead of having to permanently base themselves at the mining location.

Environmental and Social Issues

Progressing into the late 20th century, the environmental impact of mining became an increasing concern, with uranium excavation in particular drawing negative attention. Companies were encouraged to take these issues into account and many have made significant progress towards reducing carbon emissions. Meanwhile, the Australian government established organizations to regulate mining activities and ensure sustainability.

Another issue is the land rights of the native Aboriginal people. In 1993, the Australian government passed the Native Title Act which grants the Aboriginal people rights over any land they consider theirs by tradition, and where that belief is not contradicted by Australian common law. It was made illegal to conduct mining operations on such land without permission from its Aboriginal holders, and compensation is assured for any damage or reduction to such land.

A World Leader

The mining industry in general is considered unreliable, but the diversity of resources to be found in Australia has allowed its industry to survive the usual fluctuations in demand. For example, was able to supply coal when it was required in the mid-1900s, then when demand for that dwindled in the late twentieth century, the country was able to benefit from a renewed interest in gold, and so on.

Furthermore, having spent over a century developing methods for locating and excavating resources, their services will always be in high demand when it comes to information and technology. By 1999 Australia supplied 60-70% of the world’s mining software, and Australia is considered the country with the most advanced methods of Geoscientific mapping. Rich in resources and expertise, the mining industry continues to be a major strength in the Australian economy.

This post was written by Matthew Flax, a freelance writer and accountant in Cape Town, South Africa. Matthew’s interests are broad, but are primarily concentrated on history and the lessons we can learn from the past. Matthew writes on behalf of Now Learning, an online education portal that promotes Australian training and education.