Mar 29, 2017

Mining sector pumps $236.8b into Australian economy

Mining sector pumps $236.8b into Australian economy

Australia’s mining and mining equipment, technology and services (METS) sector contributed $236.8 billion to the economy in 2015-16, a report released by Deloitte Access Economics shows.

The report – Mining and METS: engines of economic growth and prosperity for Australians – was commissioned by the Minerals Council of Australia.

Minerals Council of Australia chief executive Brendan Pearson said it showed that the mining and METS sector accounted for about 15 per cent of the Australia’s gross domestic product (GDP) and supported a total of 1.1 million jobs across Australia, or about 10 per cent of total employment.

“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,” he said.

These included:

  • 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 Basin-Surat region (QLD), 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).

The report by Deloitte Access Economics also features 10 case studies of mining and METS companies, which demonstrate that innovation and technological improvements are central to the efficiency and global competitiveness of the sector.

“The case studies include examples of mining and METS innovation ranging from the use of drones and semi-autonomous earth moving equipment in mining operations to use of sophisticated mine design and modelling software and data analytics,” Mr Pearson said.

Minerals Council of Australia chief executive Brendan Pearson.

“The productivity benefits of innovation highlighted in these case studies include reduced operating costs, extending the productive life of mines, higher yields, safety improvements, and higher workforce satisfaction and productivity.”

But he said Australia’s comparative advantage in mining and METS not only hinged on innovation; it also depended on policies that strengthened competition, supported the accumulation of skills and capital, and enabled firms to respond flexibly to changing market conditions.

“Supportive and flexible policy settings helped to establish the most recent mining boom; yet there is now the potential for adverse policy settings to compromise a major source of Australia’s national prosperity and future economic growth,” he said.

The Minerals Council of Australia says governments need to provide:

  • A competitive and fair taxation system
  • Flexible workplaces
  • Openness to foreign investment
  • Affordable and reliable energy
  • Efficient approaches to regulation, especially with respect to project approvals
  • Support for collaboration between the mining and METS sector and research organisations.

The report concludes that: ‘It is critical that governments pay heed to these key policy areas and initiate reforms where improvement is required, so that mining and METS continue to innovate and grow, helping to secure Australia’s future prosperity.’

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