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14 Business View Australia - July 2015
The significance of the mining sector
can be gauged from the fact that mining
currently contributes around 8.5% to
Australia’s GDP and employs 220,000
people,whichisabout2.2%ofthecountry’s
workforce. However, these numbers
under-represent the importance of this
sector, as many downstream activities
resulting from mining are considered to
be part of the manufacturing sector. In
any case, the critical role played by this
segment of the economy is not in doubt.
The slowing down of the economy in
China has added to the woes of the
resources sector in the country. After
rising consistently for 12 years, exports
to China have been in decline for the
last 18 months. But it is interesting
to note that while dollar values have
declined, volumes have actually gone up.
In the first quarter of 2015 exports of iron
oretoChinafromAustraliaincreasedby18%
over the previous corresponding period, to
touch a level of 144 million tonnes. In this
same period prices of iron-ore declined by
48% resulting in a 31% decline in value
termsoftheexports,toalevelof$9.9billion.
This data serves to illustrate a broader
trend in the Australian resources sector.
Mining comprises about half of the
country’s exports and the major portion
is accounted for by just four commodities
– iron-ore, coal, LNG and gold. Prices of
all four have fallen over the last year and
a half and the impact has been felt in
the country’s exports, which while rising
in volumes, have fallen in dollar terms.
There has also been a slow-down in
new mining projects and the country’s
mining sector, as a whole, is moving
from a construction phase to the