Australia's Mineral Resources- A Vital Role: An Uncertain Future

The long-term outlook Tor Australla's traditional mining products is for flat demand and continuing low prices. This has come about because of three far-reaching changes since earlier boom days: 1. Continuing declines in intensity of usage of basic mine products; 2. The failure of newer western and third world developing countries to realise growth expectations; and 3. Continued production pressure from third world countries (and first-world primary producers) in an effort to earn foreign exchange and rectify trade balances. These trends have led to a general situation of excess supply and weak demand. In this environment, the prerequisites for survival in the mining sector are first-class mines, modern and efficient production methods, low unit costs, aggressive marketing, and products with reasonable operating margins. Many of Australia's mines meet these prerequisites. Following the A$ depreciation and widespread unit cost reductions, most of these mines will be moderately profitable at current depressed commodity prices. They are well placed to benefit from price rises if these eventuate. A new generation of mines is concentrating on a more profitable product range (gold, diamonds, uranium, mineral sands). Australia's balance of trade remains firmly dependent on the primary mining and agricultural industries (Fig. 1). Despite optimistic talk of high-tech developments, tourism and a resurgence of manufacturing, these will remain a small component of Australia's export structure.