Mining in the Australian Economy

With a total land area of 7,633,565 square kilometres, it’s no wonder that Australia is ranked as the sixth largest country in the world. Aside from its massive size, Australia is truly gifted with a bounty of natural resources, helping to drive the country to fourteenth in the list of the world's largest economies, third in the Human Development Index (HDI report), and tenth per capita income.

Minerals form a substantial proportion of Australia’s natural resources, comprising 35 percent of the country’s total exports. Its proximity to the even more massive country of China, as well as to other emerging Asian economies, has put Australia in an enviable economic position. This is why it is a major exporters of precious commodities to these zones. With operations on such a massive scale, Australian mining companies rely on a wide network of suppliers.

What is mined in Australia?

Although Australia is most well-known for mineral exports such as lead, iron ore, coal, and gold, it also abundant deposits of many resources:
  • Iron ore: Australia produces 25 percent of the world’s total output, making it the second-largest supplier globally in 2015 after China.
  • Nickel: Australia produces nine percent of global output.
  • Aluminium: Australia has significant bauxite stores comprising 29 percent of global production in 2015. It is also the second biggest producer of alumina after China.
  • Copper: Australia placed fifth as the biggest producer of copper in 2015.
  • Gold: Australian gold comprises 9.2 percent of the total global gold output.
  • Silver: Australia was the fourth-largest producer of silver in 2015.
  • Uranium: Australia produces 11 percent of the world’s uranium.
  • Diamond: Australia ranks third in terms of the biggest commercially-viable diamond deposits, following Russia and Botswana.
  • Opal: Australia produces 95 percent of the world’s opal supplies.
  • Zinc: Australia produces 12 percent of the world's zinc.
  • Coal: Australia ranks fourth on the list of the world's largest producers of coal.
  • Oil shale: Australia ranks sixth in terms of the world's largest defined oil shale resources.
  • Petroleum: Australia is the 29th biggest petroleum producer.
  • Natural gas: Australia is ranked as the third biggest producer of LNG.
  • Rare earth elements: Australia produces eight percent of the world’s output of rare earth elements, which comprise the fifteen lanthanides, scandium, and yttrium.
Based on these numbers alone, it’s easy to imagine how vital the mining industry is to the Australian economy, contributing about 5.6 percent to the country’s GDP. In 2018, mining actually contributed over $35 billion to Australia’s GDP.

Australian mining companies

There are 26 publicly-listed metals and mining companies in the ASX200. These comprise the top three mining companies in the country:
  • Rio Tinto: Although 44 percent of Rio Tinto sales come from iron ore extraction and exports, the company also mines copper, gold, aluminium and coal. With a market capitalization amounting to $27 billion, Rio Tinto is the second largest miner in terms of this measure, and ranks among the top 20 largest businesses in Australia.
  • BHP Billiton: BHP specialises in mining coal, iron ore, gold and copper. However, a significant percentage of its revenue comes from petroleum exploration, production and refining. BHP’s market includes North America, South America and Europe, and it has a market capitalisation valued at over $97 billion.
  • South32: Based on the ASX200 and market capitalisation, South32 is the third biggest mining company behind BHP and Rio Tinto. With a focus primarily on base metals for the production of alumina, aluminium, nickel, silver, lead and zinc, South32 operates in Australia, South Africa, and parts of South America.

Largest mines in Australia

The sparsely populated Australian landscape is home to some of the world’s largest mining operations, including:
  • Boddington gold mine: Owned by Newmont since 2009, Boddington is Australia’s biggest gold mine, producing 22,311,074.699 grams (787,000 ounces) of gold per year. Boddington also produces 36,287,389.6 kilograms (80 million pounds) of copper per year, making it one of the most productive mining projects in the country.
  • Fimiston gold mine: Covering 3.5 kilometres by 1.5 kilometres of surface area, the Fimiston open pit mine or Super Pit gold mine in Western Australia used to produce the biggest quantity of gold until Boddington moved into first place. Annual gold production has sometimes reached 22,679,618.5 grams (800,000 ounces), although year-on-year production values do vary. Fimiston is owned by Newmont and Barrick Australia through a joint venture called Kalgoorlie Consolidated Gold Mines or KCGM.
  • Olympic Dam metal mine: Located in South Australia Olympic Dam is owned by BHP, with 139,706,449.96 metric tonnes (154 million tonnes) of proven reserves. It produces both copper and gold, whilst also boasting the world’s largest uranium deposit.
  • Cannington silver mine: Operating in Queensland, Cannington silver mine has been in existence for over two decades, and is the world’s biggest producer of silver and lead.
  • Argyle diamond mine: Argyle is located in Western Australia, and owned by Rio Tinto. The mining operation comprises 40 kilometres of underground tunnels. Since starting operations in 1983, Argyle has mined more than 800 million carats of diamonds. However, its closure in 2020 has already been planned, along with the rehabilitation of the land.
The Zimbabwe mining industry debt scenario has recently seen significant legal actions, with Deputy Minister Fred Moyo losing property worth thousands of dollars due to an outstanding $1.5 million debt. Moyo and fellow directors had stood surety for a $765,000 loan from Stanbic Bank Zimbabwe Limited, which accrued substantial interest and charges. When Ox Mining, the company involved, failed to repay the loan, the High Court sheriff executed a writ of execution, seizing Moyo's assets to settle the debt. The involvement of Paul Diamond and Fred Moyo in this case underscores the financial challenges and legal repercussions faced within the mining sector.