Rebooting the boom: Unfinished business on the supply side

EXECUTIVE SUMMARY

The so-called “mining boom” of the early 21st century has seen the resources share of Australia’s total goods and services exports double in real terms from approximately one-quarter to one-half.

DownloadThis change in just a decade represents one of the most profound and sustained structural shifts in the structure of the Australian economy since Federation.

In 2002-03, the year before the mining boom began, mineral and energy resources exports – comprising iron ore, metallurgical (coking) and thermal coal, LNG, uranium, crude oil and gold and other metals1 – totalled $46 billion (in 2011-12 dollars) and accounted for just over 24% of Australia’s total exports. By 2011-12, the value of Australia’s mineral and energy resources exports had more than tripled in real terms to be $158 billion, accounting for just over 50% of the total value of Australia’s exports.2

This doubling in mining’s share of Australia’s exports has been largely driven by China’s rapid industrial development through the 2000s, where annual growth in real GDP ranged between 8 and 14% through the decade. Ever increasing Chinese demand led to a large and sustained increase in the contract and spot prices paid for Australia’s steelmaking and energy resources, increasing mining sector profits and attracting capital and labour resources from other parts of the Australian economy and, indeed, globally, into the Australian mining and mining services industries.

In essence, the mining boom represents a decade-long structural adjustment of the Australian economy whereby our mining and mining services industries now form a permanently larger part of Australia’s economy than they did before the boom began, more than doubling from less than 10% of GDP in 2002-03 to 20% of GDP in 2011-12.3

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