Australia is estimated to be the world’s third largest producer of commodities in the world. Australia’s mineral industry acts as an important catalyst to the economic growth of the country. Minerals contributed 6.5% towards Australia’s GDP (approx. $US 360 billion in 1997). Australia is the world’s largest bauxite, diamond, ilmenite and zircon producer, and is also a substantial producer of coal, iron ore, gold, uranium, zinc, lead and silver. Australia is fortunate in being nearly self sufficient in most commodities.
The country is often referred to as being a “quarry” based on the fact that only a small proportion of its mineral production is refined in the country, with the remainder being exported. The minerals industry accounts for nearly 60% of Australia’s export earnings.
Due to its unique geology and size, Australia’s mineral potential is still excellent. However, an increasing amount of exploration funding is finding its way overseas due to several local issues restricting the industry. One of these issues is that of native title, which effectively excludes vast areas of land earmarked for settlement. Meeting stricter environmental controls is beginning to be costly while red tape concerning development approvals and tax structures, such as the gold royalty regime in Western Australia, are also impediments.
A total of A$ 682 million was spent on exploration funding in 1999. A$ 428 was spent by Australian companies exploring in Africa, South America and Asia. Exploration funding dropped by as much as 21% between 1998 and 1999. Gold exploration accounted for 40% of this expenditure. The Asian crises impacted the mining industry severely, as most of Australia’s customer base is located in Asia.
