The contribution of the mining industry toward the growth of the Australian economy has been tremendous. The mining industry is often considered as an industry that involves less of technological know-how. However, the unique environment of Australia has resulted in a rapid development of specialised systems and technologies by a lot of new companies emerging to satisfy the need. This paper aims to deal with the different aspects that helped the Australian mining industry to set up a stage for it around the world. The mining industry has been undertaken by private owners, publicly funded agencies, and Mining Equipment Technology Services (METS) (Australian Industry Report, 2015). It is a combination of innovation, industrialisation, technology, and intellectual property that created a resource boom for Australia making it a developed nation.
This research paper will also discuss the growth and effects of the mining industry to the environment and health of people. The mining industry involves a lot of use of physical labour and instruments, the use of which may be harmful to people employed in the sector. It is the responsibility of the employers to ensure safety precautions for workers employed in mines. The government also has a role to play in this regard. For instance, labour laws have been passed by the government to protect the interests of workers who work in a hazardous condition. Moreover, environmental laws are also in action that protects the surrounding area in which mining activities takes place. Waste disposal is also a major concern in Australia that needs to be taken into consideration by mine operators.
1.0 Introduction
Today, Australia is identified as one of the richest nations in terms of natural mineral resources. It positions first in the world as the refiner of bauxite and fourth in the production of primary aluminium. It also holds the first position in the world for the producer of industrial diamonds and gem stones like zircon, tantalum, mineral sands ilmenite, lead, and rutile. It is the largest exporter and fifth largest producer of black coal. It is one of the largest producers of zinc, manganese ore, gold, nickel, and iron ore. Hence, Australia is recognized as a nation that has immense potential to grow and develop as one of the leading nation in the world (Minerals Council of Australia, 2014). New sites have constantly been developed in the different regions of the country to ensure that there is an unlimited supply of minerals to use and export (Boudreau-Trudel, et al., 2014). There are certainly huge areas of the continent specifically devoted to mining to make up for the worked-out mines.
1.1 History of Mining in Australia
The history of the mining industry in Australia dates back to the 19th century when man had first appeared on earth. Much of the industrial development in the country took place because of the gold rushes that took place in the 1850s. It was during this time that the Australian colonies had become famous for mining. The first discovery of Gold was made by a public official, James McBrien in New South Wales. Other officials also followed in his footsteps to the discovery of gold and other valuable minerals like copper, iron, nickel, etc. Hence, towards the end of the 19th century, Australia had become a producer of almost 40% of the world’s gold (Pells & Hammon, 2009).
After the gold rush, with the beginning of the 20th century, a significant decline was reported in the mining activities despite the high value given throughout the world to mineral production. The only major minerals produced by the country during this time were copper, lead, and zinc. However, a complete change in the scenario was observed towards the end of the 1950s. The resources boom occurred during the time when the export controls on iron ore were lifted, and industrialization began to flourish. Many new metals were discovered in the region like tungsten, uranium, bauxite, rutile, natural gas, and oil (Pells & Hammon, 2009). As a result, Australia emerged as a major exporter of many such minerals to different parts of the world, especially in the European countries and Japan.
The Australian mining industry is considered massive compared to other parts of the world, less than 0.02% of Australia is under the influence of mining (Pells & Hammon, 2009). This is rather a small part as compared to other industries flourishing in the country such as farming and grazing, infrastructure, real estate development, and urbanisation. The industry is also constrained because it is also required to manage the environment as a result of mining activities. This is because Australia gives high importance to the protection of her environment. Strict laws have been passed by the government to ensure that industrialists work by the rules and regulations passed in favour of environment protection. The people of Australia enjoy a higher status of living as compared to many other parts of the world because of which it is identified as a trading nation (Hunt, 2001).
2.0 Research Objectives
The main objective of this study is to throw light on the rise of the mining industry in Australia and its growth over the years. A significant evolution in the mining industry has been denoted from the 19th century to the 21st century. It has a great contribution in improving the global position of Australia, as the country has many rich sites for many valuable metals like nickel, cobalt, iron, copper, etc. The report examines the contribution of the industry to improving the GDP of Australia. It also highlights the advantage that the industry has with advancement in technology and innovation fostered by private and publicly funded companies.
The paper is focused on defining the effects of the mining industry on the environment and health of people in Australia. It is significant to consider this aspect, as people and environment are greatly affected by such industries that can pose harm to them. For instance, waste disposal is a major concern in the mining industry. The government of Australia to conserve nature has passed various laws to be followed by the industry key actors.
The research methodology used for the paper are from secondary sources of information such as government publications, journals, newspaper articles, etc. It has been reported that with the emergence of the 21st century, the global commodity prices soared driven by the strong economic demand for mineral resources all over the world. From 2003 to 2011, prices for the export of Australia’s resources increased by more than 300% after a no growth rate for about two decades (The Story of Minerals in Australia, 2015). Although the increase in growth has been broad based, there was a significant rise in the prices of major steel manufacturing products exported by Australia. There was also a drastic rise in the prices of energy resources like thermal coal and oil. The significant increase in the prices indicates that the supply had difficulty keeping pace with the increasing global demand.
2.2 Research Questions
The paper would mainly focus on the following research questions:
• What is the change reported in the mining industry from the era of industrialization till now?
• What has been the effect of the mining industry on the health and environment?
• What are certain measures to overcome the effects of the mining industry on the health and environment?
• What is the future of the mining industry in Australia?
3.0 Mining Productivity in Australia
Productivity is the term used to define the process by which outputs are produced by the industry using inputs. There is a close relationship between the productivity of any industry with the economic growth of the country. Hence, the purpose of any industry is to maximize its productivity such that the expected outputs can be generated with the considerable utilization of the outputs with the firm (Boudreau-Trudel, et al., 2014).
In the national discuss of Australian mining industry, there is a bit of slowness reported as a result of input to output lags. Natural resources are also depleting fast making many of the mining sites worked out, thereby resulting to huge financial loss to owners. According to Boucreau-Trudel et al. (2014), the cost of extraction and technological resources in the mining sector is also high. This is because unlike other industries, the mining industry gives extraordinary significance to the quality of the resources. If any impurity or loophole is detected in the mining process, the ore extraction will be impure, thereby reducing the quality and cost of output.
3.1 Causes of Decline
The growth in the mining industry was more in the 1990s as compared to the 2000s. In the 1990s, there was much support from the government to grow the mining sector, as industrialisation was in the growth stage. Several facilities provided included input quotas, tariff assistance, floating of exchange rates, and liberalisation of financial markets. There were various reasons because of which there had been a significant decline in the mining productivity (Boudreau-Trudel, et al., 2014).
However, with growth and increasing competition, concepts like monopoly took a backseat. Institutional and regulatory reforms were introduced by the government to protect the interest of workers, labour market reforms occurred, infrastructure services improved which also added to the cost of manufacture. Hence, the onset of the 21st century saw a reduced enthusiasm in miners to set up mining areas because of high capital investments. People had also started engaging in different industries because of skills and labour shortage in the mining sector due to technological advancement (Segal, 2006). Other reasons for the reduction in the mining industry were as follows:
3.1.1 Input-Output Lags
There is an input-output lag in the mining industry because of high capacity building and high labour investment. The process of ore extraction is cumbersome involving the use of high machinery and input resources that increase the cost of extraction (Boudreau-Trudel, et al., 2014). Also, with increasing competition, the prices of outputs also became unstable, thereby posing a threat to the existing players in the industry.
3.1.2 Deeper Natural Resources
With the increase in competition, natural resources used as inputs also started declining. The procurement of resources became much difficult for the miners. The resources available were also of marginal productivity that yielded a considerably low value of output. Resource depletion because of extensive exploitation over the years resulted in higher commodity price, thereby making it difficult for the miners to accommodate the costs at existing price rates (Boudreau-Trudel, et al., 2014).
3.1.3 Low Yielding Resources
Depletion of existing resources requires much greater use of technology and services to reach the expected level of output. Hence, the cost of production increased manifold for the mine owners. They started accessing the easily available resource first such as oil and gas basins (Syed, et al., 2013). Thus, from the extraction of high-grade ores, mining shifted to low-grade ores of poor quality that consumed more inputs for a unit of output.
3.1.4 Inadequacy of Vintage Capital
The slowdown in productivity resulted in a halt to the growth in technology due to the existing mines experienced slow growth rates. This resulted to a reduction of both capital and labour productivity (Syed, et al., 2013).
3.1.5 Mismatch of Labour and Capital
The 19th century was marked by a high capital growth as compared to the labour growth. In contrast, the 20th-century witnesses the just opposite, a high labour growth as compared to the capital growth. With the decrease in capital, the mining industry could not accommodate the available skilled labour, as the miners had become uncertain about the demand for resources in future (Arif Syed, 2013). Hence, people started looking out for other avenues of work because of which the industry gradually became less of both capital and labour.
3.1.6 Lumpy Nature of Mining Investment
Another major cause of decline in the market proximity of the mining industry is its lumpy nature. In today’s era of competition, people in business are frequently looking out for quick returns for their investment. However, in the mining industry, this is not the case. The investments are huge in this case and it might take years for the return to start coming in. Hence, people find the industry to be unprofitable and do not like to invest in the lumpy industry (Bartos, 2007).
3.1.7 Unpredictable nature of commodity prices
Bartos (2007), in his report stated that the nature of commodity prices is also unstable and unpredictable in the mining industry. Miners wait for the prices of the resources to decrease before investing in the business. In times of high prices, miners may be unwilling to invest. However, when such prices last for longer periods, the production process may suffer, after resulting in a much slower output growth (Bartos, 2007).
4.0 Innovation and Technology
Some of the problems described in this report on the mining industry, such as the cost of digging deeper and refining of the net ores can be reduced with the assistance of better technological equipment. With the drastic advancement in technology, many new machines have been invented and introduced making exploration, extraction, and refining quite easy. From the time when hard-rock mining was the trend, new inventions have been a part of this ever-changing industry. Innovation has been a key resource for the growth of the mining industry. Both Companies in the field of mining and regulators (government) have put in huge investments across the world for research and development of new processes and techniques to extract ore, remove impurities, and reduce costs involved in the process of mining (Bartos, 2007).
For example, in oil and gas production, there has been a significant development to improve the drilling technology which eventually resulted to an increase in the use of steeply inclined and even horizontal drilling. This has helped the miners to reach the resources not economical with the use of standard vertical wells. The truck sizes carrying these ores have also increased from 25-tonne payload to around 400 tonnes used today to reduce the cost of transportation for organisations or the consumer in the field (Syed, et al., 2013).
Automation has also been suggested in the mining industry, as the conditions are hazardous to work for humans. Prolonged exposure to metallic ores during the exploration or extraction process can pose harm to human health. However, automation is much expensive to implement. Introduction of such drastic and step-change progress can result in devastating results if done at ones. It is a complex process of taking multiple steps systematically. Dedicated teams are working on such processes in the research and development department of both the public and private companies that work on such measures to revive the mining industry in Australia.