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Mining Australia2011

Mining Australia2011

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Published by: José Gregorio Freites on Sep 22, 2013
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This report was researched and prepared byGlobal Business Reports (www.gbreports.com) forEngineering & Mining Journal.Editorial researched and written by Ramona Tarta,Thomas Willatt, Joseph Hincks, Camille Veillon andPatricia Matey.For further information, contact info@gbreports.com
Australian Minin
 A great mining nation adapts to new challenges and fresh opportunities by  applying unmatched operational expertise and incorporating home grown innovation.
SEPTEMBER 2011
Cover photo courtesy of Newmont - Undergroundheavy machinery workshop - Tanami
 A REPORT BY GBR FOR E&MJ
A Supplement to E&MJ
 
2
E&MJ
SEPTEMBER 2011 www.e-mj.com
A Vast Nation of AbundantOpportunities
A brief introduction to Australia’s mining industry
Australia, the sixth largest country in theworld, stands out for vastness and the abun-dance of its natural resources. Its territorycontains 28 billion mt of demonstrated iron
ore resources. Australia is the world’s larg
-
est coal exporter, the world’s second largest
producer of gold and nickel and the thirdlargest supplier of uranium. Copper, silver,bauxite and zinc are also found in great
quantities in Australia’s rich geology. This
profusion of mineral resources has shapedthe history and the economy of the country.Yet it now seems that Australian min-ing is reaching a turning point in its history.While the country is benefiting from a miningboom that is tangible in most aspects of theeconomy, the industry has to fight new strug-gles in order to remain internationally com-petitive. As skilled labor has become scarce,the remunerations in the mining sector havesoared, leading to a steep increase in projectcosts. At the same time, the upheaval cre-ated by the attempt to introduce a ResourceSuper Profits Tax (RSPT) showed certain fra-gility in the relationship between the miningsector and the Australian federal government.
A Resource-based Economy
Australia is the 13
th
largest economy in theworld as of 2009/10 and boasted an impres-sive 17 years of consecutive GDP growthprior to the global economic crisis. Even dur-ing the global financial crisis, Australia onlysuffered a mere quarter of negative growth,before a commodity exports-driven recoveryproduced 1.2% growth in 2009, outper-forming all other OECD countries.The resources sector is the driving force
behind this recovery and is the country’s
AUSTRALIAN MININg
largest export sector. According to Michael
Roarty , a member of Australia’s parliament,
in 2008-09, the resources sector accountedfor more than 80% of total commodity ex-ports, contributing A$160 million to exportearnings. From global industry-leading play-ers like BHP Billiton and Rio Tinto to mid-tier miners and junior companies, the Aus-tralian Securities Exchange (ASX) lists morethan 600 mining companies.The boom that Australia is currently ex-periencing is expected to continue for sev-eral years. Australia is enviously positionedto capitalize on the ever-increasing demandfrom China and India. Mining and energy ex-ports are expected to rise by 16% to A$215billion in 2011-12 and Ric Battelino, deputygovernor of the Reserve Bank, forecasts anestimated 6% GDP growth in mining invest-ments over the next three years.According to the Fraser Institute, Aus-tralia has now started recovering from theblow that the RSPT struck to the industry.Although Canada is still lauded as a modelin terms of mining investment, Australiais in the process of blotting out the regu-latory uncertainty. With mining companiesrepresenting about a third of all ASX-listedcompanies, building investor confidence is apriority. The ASX is internationally renownedas a source of exploration-to-developmentinvestment, a continuity appreciated by ex-ploration companies since they need steadyfunding in order to make significant discov-eries.From contractors and suppliers to min-ing consultancies, the network of servicesavailable to mining houses based in Aus-tralia is extensive and at the cutting edgeof technology. Anne Nolan, former directorgeneral of the Western Australia Departmentof State Development, underlines the regionis world-leading in terms of mining softwareand design and sees this as a key route toensure wider economic benefit from com-
modity exports. “We have become very good
at the services that make a mining industrywork. If you feed the mining industry, andensure a diverse portfolio of development,
key synergies start to evolve,” she said.
As emerging mining hubs around theworld increase their competitive stakes,these are challenging times for the Austra-lian mining sector, but the majority of par-ticipants we interviewed for this report wereoptimistic the conjunction of an incrediblyrich geology with a world-leading expertise
will allow the nation’s industry to overcome
these specific issues and to remain at theforefront of the global mining scene. Asservices companies invest substantially inR&D, innovation has become the corner-stone of the sector and earned the country areputation for technical excellence that willdoubtlessly boost the industry in the yearsto come.
Investment Risk Profile
The attraction of mining investment to anynation ultimately comes down to its uniqueinvestment risk profile. In some nations,that risk is obvious. Unstable governments,vague mining codes and disapproving com-munities are obvious factors. These consid-erations do not, however, keep Australianminers awake at night.It is this security that appeals to many of
Australia’s most successful resource devel
-
Conveyors at Newmont Boddington Gold Mine (photo courtesy of Newmont)
 
www.e-mj.com
E&MJ
SEPTEMBER 2011 3
AUSTRALIAN MININg

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