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Australia, the large Island continent, has been generously furnished with abundant natural

resources. With these resources, not surprisingly the various kinds of industries utilizing these
resources are emerged in Australia. One of the most important industries is mining. Australia
has the world's largest reserves of several mineral commodities in both minerals and energy
resources. The Mining sector includes all units mainly engaged in mining, including the
mineral exploration, and the provision of a wide variety of services supporting mining and
mineral exploration. The discovery of the gold in New South Wales and Victoria has forced
Australia into the group leader in mining countries since 1851. This essay will focus on the
mining in Australia and review the history of the mining that contributes to the economy and
the impacts on society.

Iron ore is Australias highest valued and most successful commodity export. Throughout the
1990s and early 2000s, this mining industry played a key role in both Australias and the
global economy. The change in the industry was brought about, particularly, by the many
operations and movements resulting from globalisation that pushed Australias exports further
than they had ever been. In 2007, Australia produced around 16% of the world's iron ore and
was ranked third behind China (32%) and Brazil (19%) (Minerals Council of Australia,
2008). Although Australia is not the largest producer, it is currently the largest exporter of
iron ore in the world (Australian Minerals Industry, 2008).

In 1997, Australia produced 158 million tonnes of iron ore. However, in 2007, this figure had
more than doubled with a total of 320 million tonnes (U.S. Geological Survey, 2008). Such a
significant change is partly attributed to the continuous expansion and diversification of the
industrys two key players, Rio Tinto Group and BHP Billiton, into the Pilbara region of
north-western Australia. Other sensitivities include environmental and social demands,
technological advancements, and research and development amongst others. It must be noted
that each of these factors can be drawn back to a single title that is a major influence on
industries worldwide: globalisation. Figure 2 shows the production levels of iron ore over
the 2006-07 period, and its export value compared to other mined minerals.

Australian mining industry has a long history. It was primarily believed that the arrival of
Aborigines originated Australian mining for 40,000 years ago when suitable stones were dug
for making tools, weapons and decorations. In 1788, modern mining was initiated due to the
arrival of the European. Almost 200,000 criminals, who were the first group of immigrants,
were shipped from England to Australia which was one of the colonies in that period
(Department of Immigration and Multicultural and Indigenous Affairs 2005). The European
quarried and shaped Hawkesbury sandstone for early buildings at Sydney Cove. This incident
led Australia into modern mining. In the early Australian mining industry commenced with
the coal mining in Newcastle gathering surface coal for sales in 1798 and starting an
international trade in mineral commodities when coal was exported to India in 1799. After
that the discoveries of major minerals followed by lead in Glen Osmond Hills in 1841, copper
in Kapunda in 1842 and gold in Burra Burra in 1845. However, the mineral sources have
constantly been found all over the continent.

Mining Industry has played a key role on Australian economy for a century since gold was
discovered in Australia. The economic value in mineral sector has grown up considerably.
Mining generated from 3.4 percent of Australia's Gross Domestic Product in 1982-83 to 4.6
percent in 2002-03. The mining sector has created the Australian economic growth, especially
in terms of exports. Lewis (2000 ,2) states that the industry makes up around 40 percent of
Australia's merchandise exports each year, contributing around 40 billion dollar annually to
the economy. The value of exports from the mining industry has grown by 95 percent during
1994-2004, 45 percent more than the growth in manufacturing industry and 26 percent more
than for all industries. Australia globally exports mineral commodities to many countries, for
instance, Japan, Republic of (South) Korea and United Kingdom. Japan is the major buyer
with approximately more than 20 percent of the total export value in minerals each year. "Of
the countries in this region, Japan is consistently the main destination for Australian minerals
and oil for the period 1988-89 to 2002-03. Its share of total exports of minerals and oil was
27% in 2002-03." (2005 Australia Year Book 2005, 509). These developments can be seen
that mining industry is important to the Australian economy.

The driving forces of globalisation have a direct impact on the success of the iron ore mining
industry in Australia in terms of the national and global economies. BHP Billiton and Rio
Tinto Group, both as Transnational Corporations (TNCs), have further increased industry
sales and exports, and reduced the costs of production by utilising economies of scale. Mine
expansion and the opening of new mines in the iron-rich areas of Queensland, New South
Wales and Victoria have resulted in great benefits for the Australian economy and rapid
national growth in the global economy.

China, as the worlds largest importer of Australian iron ore, is considered one of the greatest
influences on the success of the industry. If China were to reduce its purchases of Australian
iron ore and rely more on its own sources and that of countries such as Brazil, India or
Russia, Australias growth in the global economy would lessen and the Australian economy
would be disrupted as a result of unexpected sales issues. Growth in the Chinese economy
and its demand for mineral resources, particularly base metals, iron ore and coal continue to
play an important role in the outlook for exploration in Australia. (McKay, 2008)

Technology, communications in particular, has also had a strong influence on the continued
success of the iron ore mining industry in Australia. With the steady introduction of new
communication technologies and advancements in transport and information processing, BHP
Billiton and Rio Tinto are able to make exceptional use of global communication as TNCs,
and further increase their exports into the global marketplace. These technological
advancements are allowing not only the TNCs to develop and enhance their operations, but
also the world economy itself, which is constantly utilising technology as a way of
interlinking each country and creating a global village. For several industries, including
mining, the environment has had a significant influence on the development and global
recognition of TNCs and the industries they support. In the case of iron ore mining in
Australia, if the condition of the environment rapidly decreased and the levels of iron ore in
the Earths crust were diminished, it is clear that the iron ore mining industry would also
struggle to find natural sources. Hence, a chain effect would occur and the ties between
Australia and China would be at risk, and the national and global economies would be
jeopardised. As such, it is no wonder that the environment may be considered one of the
greatest influences on the iron ore mining industry.

The final influence of considerable wealth that affects the iron ore mining industry in
Australia is local and foreign government. The Australian government plays a large part in
the industry through deregulation, trade barriers, and industry support and export assistance.
By removing industry regulations, the federal government has been able to increase
competition and, hence, efficiency between the TNCs and the smaller industry participants.
Trade barriers including tariffs and taxes are continually under negotiation to be reduced, so
as to benefit Australias economy through other countries. For example, if another country
were to pay fewer taxes and tariffs on Australian exports, that country would continue to
return, as they are benefiting financially. As such, the Australian economy also profits from
this further integration into the global market.

Deregulation and trade barrier negotiations also provide the government with a means to
support the mining industries. The Department of Innovation, Industry, Science and Research
offers support by developing international competitiveness and increasing productivity and
efficiency. The Department is committed to developing policies and delivering programs, in
partnership with stakeholders, to provide lasting economic benefits ensuring Australias
competitive future. (Commonwealth of Australia, 2008) Both the state and federal
governments provide export assistance to businesses within an industry. This assistance is not
subject to a particular industry; it is diverse enough to accommodate for all Australian
industries. The state governments control programs such as the Trade Development
Program and Enterprise Improvement Programs, which allow businesses to develop
strategic planning and innovation, and establish and grow offshore commercial activities. At a
federal level, there are three main companies that provide export assistance to all industries:
Department of Foreign Affairs and Trade, Austrade and AusIndustry. Each of these
companies put forth individual development programs and schemes to assist business exports,
but to a more substantial level than that provided by the state governments.

Foreign governments do not play a role as large as the Australian government when
considering the Australian iron ore mining industry, however, it must be noted that trade
barrier negotiations between Australia and other countries is of great importance for
exporting and importing. Therefore, the APEC agreement is so widely accepted, as it creates
ease in trading and economic cooperation between the members.

The role of the government in the Australian iron ore mining industry is much the same as it
would be for any other industry. The assistance provided by the state and federal governments
is objective and the trade barrier negotiations are put in place to benefit all concerned. As
such, the role of the government in the Australian iron ore mining industry is of a very high
standard and is supportive and directive.
There are a number of forces for change that the Australian iron ore mining industry has
taken control of and uses to its own advantage. For example expansion, diversification,
technology, economic cycles and economies of scale. Within the industry, BHP Billiton and
Rio Tinto have both utilised expansion to other countries and new target markets, and hence,
diversified to accommodate the needs of the new target markets. As TNCs, they are also
making use of their knowledge of economic cycles and economies of scale, in order to benefit
themselves and the industry as a whole. Technology is a force that has been welcomed by the
mining industry and has been proved to enhance the success and global recognition of the
Australian iron ore mining industry. The few forces for change that this industry, such as
regulations and barriers, has not utilised do not appear to be an issue and the industry itself is
strong and unlikely to struggle because of unexpected change.

Among the issues currently affecting or emerging amongst the iron ore mining industry in
Australia are slowing economies, health and safety regulations, recruitment and rapid
expansion. With the conclusion of the 2008 Beijing Olympics, China is experiencing a
slowing of its economy. The Chinese government is no longer expanding at the same scale as
it was in the lead-up to the Olympics, so Australias iron ore is not needed for structural
purposes of a similar standard. Hence, the iron ore mining industry in Australia is
experiencing a slight downfall in sales to China, however it was an expected issue and it
would have been prepared for. Health and safety regulations are constantly an issue in all
industries, although many further regulations are imposed on mining because of the nature of
the work. This is a continuous battle fought by those involved in the iron ore mining industry
and it is one that is unlikely to cease in the near future. Recruitment is an issue similar to the
health and safety regulations, in that it is a constant issue for all concerned in the industry.
Again, it seems unlikely to be resolved in the near future. The rapid expansion experienced
by the Australian iron ore mining industry itself, and in particular the TNCs, is not a current
issue but if it the expansion continues at the same current rate, the industry may find itself
slightly out of control. In this situation, the slowing economies issue would assist in
preventing such an occurrence, as the expansion cannot occur without a strong market for the
industry to rely on.

The issues that are currently affecting the Australian iron ore mining industry are constant
and the operations managers have individual methods to overcome them. The companies
within the mining industry may foresee emerging issues, and if so, they are most likely under
control. In any situation, the iron ore mining industry is the strongest in Australia and it is
able to withhold its position in the global marketplace and it will continue to support
Australias integration into the global economy for many years to come.

There are several impacts on Australian society in demography related to population,


immigration and employment. Gold discoveries had a tremendous impact on all parts of
Australia. From 1851 to 1861, Australia's population trebled. O'Malley (1988 ,24) claims that
the number of people living in Australia increased from 200,000 to around one million within
a decade. The gold rushes brought the tremendous increases of population, changes to society
and wealth. For example, "In the ten years to 1861, Victoria produced 750 tons of gold, some
40 percent of the world's output in that period." (Shackleton and Binnie 1993, 39). During the
Golden Rush era of 1851 to 1860, early migration peaked at arrivals of around 50,000 people
a year. Most immigrants came from Europe, America and particularly China. The first
Chinese seeking gold arrived in 1853 and there were 2,000 Chinese in Victoria in 1854. In
1858, the Chinese population of Australia reached a peak of 40,000. "During this period,
Chinese immigrants were the largest non-British group." (Department of Immigration and
Multicultural and Indigenous Affairs 2005). The growth of Australian population is related to
the employment in the mineral sector. Blaniney (1978, 6) claims that the mining sector is a
major employer with more than 60,000 employees. Moreover, the industry also creates more
than 300,000 further indirect jobs from manufacturing downstream products related to the
mining sector. "The minerals sector therefore directly influences output, income and
employment in those sectors which supply its inputs." (Cook and Porter 1984, 9). While this
is just a only tiny proportion of the national workforce, the mining industry is a key employer
in regional and remote Australia where most mining operations take place. Thus, when a new
mine is discovered, population growth seemingly follows.

In conclusion, it can be seen that mining industry is a significant contribution to Australia's


Development of the Mining Industry. Australia's mineral industry has progressed dramatically
over a century mainly in economy and society and finally become one of the world greatest
leaders of mineral exporters both in value and volume. Australian mining has played a great
role in its society, generating wealth and opportunities for its people. Investment
opportunities on Australian mining will keep continuing as long as the potential of Australia's
resource is outstandingly developed.
References

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Chapman, Stephen et al., 2000, Business Studies In Action: HSC Course 2nd
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