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1350.0 - Australian Economic Indicators, 1995  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 01/08/1995   
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1995 Feature Article - Valuing Australia's Natural Resources - Part 1
This article was published in Australian Economic Indicators August 1995 issue on 1 August 1995.



INTRODUCTION

This is the first of two articles reporting on the ABS's work on the valuation of natural resources from the recently released national balance sheets (Occasional Paper: National Balance Sheets for Australia, Issues and Experimental Estimates 1989 to 1992, ABS cat. no. 5241.0). "Natural resources" in this context cover land, forests and subsoil deposits. The value of natural resources has not previously been included in the Australian national accounts, and these experimental estimates represent the first attempt by the ABS to value consistently a diverse range of Australia's assets.

This article discusses the issues involved in the valuation of subsoil deposits and presents the ABS's estimates based on our preferred conceptual approach. The second article will discuss the issues involved in the valuation of land and forests in Australia and will also present some results.


BACKGROUND

Over the last decade there has been a growing awareness in Australia as well as overseas of the importance of the environment and a growing demand for environmental statistics to assist research and decision-making. As part of this development, the new framework for national accounts A System of National Accounts 1993 (or SNA93)<Endnote1> recommends including natural resource assets in the national balance sheet. The work described in these articles was undertaken by the ABS in response to these changing demands.


In line with the recommendations of SNA93, the ABS has applied the principle that the valuation of an asset<Endnote2> must be related to its ability to earn its owner an income, either immediately or at some definable future date. It should be noted that natural assets may have other intangible values in addition to commercial values. However, it is not feasible to measure these in a national accounts context.

SNA93 recommends that, where possible, asset valuation should be on the basis of current, observable market prices as this is the basis on which decisions by producers, consumers, investors and other economic agents are made. However, for the most part, there are insufficient data on transactions in natural resources to support this approach. This problem is recognised by SNA93 which suggests net present value (NPV) of the future stream of income as an appropriate conceptual substitute.


SUBSOIL ASSETS

Subsoil assets are defined in SNA93 to consist of "proven resources of mineral deposits located on or below the earth's surface that are economically exploitable given current technology and relative prices" (SNA93, para. 13.59). They include known deposits of coal, oil and natural gas resources, metallic mineral resources and non-metallic mineral resources, including deposits under the sea.

Classification of subsoil assets - the McKelvey box

Resources to be included in the national balance sheet must be in sufficient quantity and have a sufficient quality to make their extraction economic. The interaction of economics and geology is illustrated in McKelvey's Box (Figure 1) as adapted by the Bureau of Resource Sciences in Canberra (BRS). It cross-classifies subsoil assets by two characteristics. The vertical axis indicates the degree of economic feasibility and the horizontal axis indicates the degree of geological assurance of subsoil assets. The boundary between identified (discovered) and undiscovered resources may change as a result of technological improvements or a mining company's investment in exploration and development. Economic resources, which encompass economic demonstrated resources (EDR), as well as part of the inferred and undiscovered resources, are all deposits which are judged to be economically exploitable at the time of assessment (ie, they are profitable over the life of the mine). The definition of economic resources is based on the important assumption that markets exist for the commodity concerned. The BRS also assumes that producers or potential producers will operate at optimum rates of output and will receive the going market price for their products.

FIGURE 1. McKELVEY BOX AS ADAPTED BY THE BUREAU OF RESOURCE SCIENCES
Figure 1 shows the interaction of geology and economics in the "McKelvey Box", as adapted by the BRS


Whilst the total stock of Australia's minerals is unknown it is important to note that economic demonstrated resources are a small component of the total resource stock (as shown in Figure 1). EDR is the term used by the BRS, instead of reserves, since the latter term is used by various groups to describe different resource categories. EDR refers to those resources whose geological assurance is demonstrated and for which extraction is expected to be profitable over the life of the mine. It approximates both proven and probable reserves. The ABS has chosen to value EDR rather than just proven reserves as recommended by SNA93 because:
  • the data for proven reserves are not available separately from EDR; and
  • measuring proven reserves only is inappropriate for a country as rich in resources as Australia.

Estimates of EDR and their values may be used for a number of purposes including setting priorities for future mineral exploration and research or assessing the need to find alternative sources of raw materials.

Valuation issues

It is difficult to value subsoil assets, as they have not yet entered the production process. SNA93 recommends that, in the absence of market transactions, the value of reserves be determined by the present value of the expected net returns resulting from the commercial exploitation of those assets, although such valuations are subject to uncertainty and revision. Similar studies in the United States and Canada have used the NPV method,<Endnote3> which makes the simplifying assumption that the present price and cost regimes will persist until the resource is exhausted.

Problems with the NPV method

SNA93 recognises that the NPV method is subject to great uncertainty and that the estimated values are subject to considerable revision. The major drawback is the uncertainty surrounding:
  • the future price of the commodity;
  • the technological developments which will occur during the life of the mine;
  • the true size of the deposit and any nearby deposits; and
  • the quantity and quality of the deposits yet to be found.

The ABS approach and data sources

The approach used by the ABS in calculating the NPV of the EDR was to take the value of gross output during a year and to deduct costs (including a "normal" return on capital) to derive net income. This was taken to be the equivalent to economic rent.<Endnote4> The stream of future net income was calculated for each year, taking into account the size of the resource at year end, average annual production and the average mine life. This future income stream was then discounted to obtain its value in today's dollars.

Most of the data for prices and the volume produced for Australia's resources are readily available from Quarterly Mineral Statistics, published by the Australian Bureau of Agricultural and Resource Economics (ABARE) (one exception was brown coal for which there is only one purchaser). The financial year-end price for the commodity for each year was used here (except in a small number of cases; for example, diamonds where the average of quarterly prices was used (see below) as there was too much volatility during the year).

Physical volume estimates of EDR in Australia are published annually by the BRS in Australia's Identified Mineral Resources.

The estimates for costs were prepared by a private consultancy firm. Cost data cover labour, on-site costs, mining and milling costs and depreciation charges. In addition exploration costs within the mine lease were also included and also a normal return on capital.

The "normal" return on capital used was the Commonwealth government 10-year bond rate which was multiplied by the net capital stock for the mining industry (using the ABS's capital stock estimates). This figure was divided by the average extraction costs. The resulting percentage was used to mark up the extraction costs for each commodity. The 10-year bond rate was chosen as there are insufficient long-term corporate bonds in the Australian market. However, by choosing a riskless investment, the ABS has underestimated the costs of operation (including a "normal" rate of return on capital) and in consequence, overestimated the economic rent. In addition, this approach makes the assumption that the rate of return is the same for all commodities.

Mine lives were calculated by dividing the estimated EDR in each year from 1988-89 to 1991-92 by the average of the annual production in those four years.

The discount rate chosen should represent the cost of the risk in waiting for the cash flow from a project. Risks or uncertainties include, for example, the existence of markets, competition and natural disasters. The longer the lead time, the greater the risk that expected future cash flows will not eventuate. Other factors which must be considered in setting an appropriate discount rate include the weighted average cost of capital, future inflation and the rate of return available from alternative uses of investment funds.

The Securities Exchange Commission in New York requires that mining companies use a 10 per cent rate of discount but the ABS judged that that was too high in the present economic environment. The real discount rate preferred by the ABS is 7.5 per cent, although a 5 per cent and a 10 per cent rate were also applied as points of comparison. Interested parties are invited to comment on the choice of rate.

Discounting an uncertain future flow of income embodies a number of assumptions regarding a "steady state", that is that price, production, interest rates, operating costs and returns to capital will remain unchanged from the year the estimates are made until the resource is exhausted. These assumptions are clearly unrealistic. Moreover, the resource life is unknown until the subsoil asset is fully extracted. However, these assumptions were considered to be more appropriate than attempting to forecast factors such as prices and interest rates well into the future.

Other methods of monetary valuation for the value of subsoil assets examined by the ABS were the net price method<Endnote5> and the user (or replacement) cost method<Endnote6> but both were considered to be inappropriate.

Results

Total subsoil values are shown in Table 1 using the NPV method. At 30 June 1992, the value of Australia's economic demonstrated subsoil assets, using the NPV approach and a discount rate of 7.5 per cent, was estimated to be $145.2 billion. This figure represents 22 per cent of the estimated value of Australia's non-produced assets, 7.8 per cent of Australia's non-financial assets, 7.3 per cent of Australia's total assets, and 8.7 per cent of Australia's estimated net worth at 30 June 1992. Further, over the three years from 30 June 1989 to 30 June 1992, the relative importance of subsoil assets as a percentage of net worth grew by 24 per cent. While these values may seem to be low in view of the perception of the role of minerals for the Australian economy, the mining industry's importance can be better demonstrated by its impact on the balance of payments (23 per cent of gross merchandise exports in 1993-94). Moreover, in the discussion below ("Interpretation of the estimates"), the issue of resource size is explored.


TABLE 1 TOTAL VALUE OF AUSTRALIA'S ECONOMIC DEMONSTRATED RESOURCES, USING YEAR END PRICES,
AS AT 30 JUNE, 1989-1992, (BILLION)

Rate of discount
0 per cent
5 per cent
7.5 per cent
10 per cent
1989
841
156
109
84
1990
842
163
116
90
1991
958
190
136
106
1992
891
199
145
115



Appendix 1 shows the size and value of the current estimates of EDR of the 33 major mineral commodities in Australia, associated with mineral fields which have been discovered to the end of December for each year. The results suggest that at 30 June 1992, bauxite ($36.6 billion), gems ($27.2 billion), iron ore ($27.2 billion), crude oil ($12.8 billion) and natural gas ($10.7 billion) had the highest value of the major commodities in Australia. While the value of these commodities may be high relative to other commodities, it should be remembered that some of the other commodities make major contributions to our export income, for example, gold ($4.0 billion) and mineral sands ($0.7 billion).

Further, the NPV estimates are subject to considerable variability from one year to the next, due to factors such as changes in price or changes in the costs of extraction. As an example, the NPV of black coal was estimated to be negative from 30 June 1989 to 30 June 1991 (but shown as zero in the table) but by 30 June 1992 black coal was estimated to have a value of $1.9 billion. The turnaround in value was mainly the result of a reduction in extraction costs.

Minerals not included in Appendix 1 are those for which no EDR information is available either because the EDR for the minerals are unknown or because the demonstrated resources of minerals are in almost infinite supply (for example, clay and sand) and hence are not measured.

Interpretation of the estimates

Given the way estimates of the value of subsoil assets are derived, only a very small portion of the total resource is accounted for at any one time; and valuation can give a very misleading impression of the extent of the resource. The argument here is not that valuation should not be attempted but rather that the monetary valuation should be used in conjunction with the physical stocks of the resources. The volatility of the estimates of the value of EDR, as shown in Table 1, could be due to one or more of the following factors:
  • Mineral prices can fluctuate considerably over a year.
  • The quantities of EDR may have changed because of the technological developments.
  • The quantities of EDR may have changed due to conceptual or classification changes in the compilation of the estimates by the BRS.
  • Some resources which had been previously sub-economic might have become economic (or vice versa) due to price fluctuations.
  • The choice of discount rate has a considerable impact on the estimates.

As shown in Appendix 1, many resources in Australia have very long potential lives at present production levels and present price and cost regimes (for example, bauxite 125 years, black coal over 300 years) mainly because the reserves that have been identified are close to the surface and have not entailed great expense to find. However, for crude oil and gold, the lives average only 10 years, while copper is a steady 21 years, reflecting the far greater cost of finding and proving these resources and the concomitant disinclination of firms to tie up capital. However, the exact size of the economic resource is known only when the well or mine has ceased to produce.

Hence, both the monetary and physical estimates must be viewed with some caution. Monetary estimates are subject to considerable volatility and accordingly can give a deceptively optimistic or pessimistic picture. Physical estimates may offer a very limited view of the resource's full extent. For countries such as Australia, where there are potentially vast resources undiscovered, the physical estimates should be seen more as an indicator than as a definitive statement. Nevertheless, the physical volumes of the resource are at least as useful (in terms of analysis of the resource and the country's overall financial position) as the monetary values. They show that, provided there remain reasonable lives, there should be no undue concern about exhaustion. The "stock" (i.e., the physical resource in the ground on which the valuation on the balance sheet is based) can be expected to remain reasonably close to constant, provided that:
  • the ore body is not being exhausted, prices have not fallen sufficiently to render the ore body uneconomic or risen so much as to prompt accelerated production, and
  • discovery remains broadly in line with the usage of the resource.

While the physical level of the resource remains fairly constant, it may be interpreted as implying that some sort of "sustainability" is possible. But this concept should not be taken too far because there may be other reasons beside exhaustion of the reserve that could result in a drop in the resource. Changes in the demand for the resource may be caused by changing technology or environmental concerns. Coal, for example, may be regarded as limitless to all intents and purposes but for many countries, coal reserves (as an economic resource) may be disappearing as fast as oil, gas and electricity have replaced it and environmental concerns may have raised the costs of the externalities.

Meanwhile, although monetary valuations will reflect certain economic realities, such as the on-going viability of the resources over the foreseeable future, taking current prices and extraction costs into account, there must be a recognition of the limitations that are embodied in those estimates (such as on prices and interest rates). Valuation of natural resources is still very much in its infancy and interpretation of the results should be made in that context.

CONCLUSION


This article has discussed the conceptual issues related to the valuation of subsoil assets, including the approach taken by the ABS. Subsoil assets represent a significant part of Australia's assets and export earnings. However, interpretation of the results should be undertaken with care as there are still many conceptual and data issues to be resolved. Readers are invited to provide comment by writing to: Director, National Accounts Research Section, ABS, PO Box 10, Belconnen, ACT 2616.

The second article in this series will discuss critically the methodologies and data sources used in the calculation of the ABS's estimates of the value of land and forests in Australia.

Endnotes

1. The SNA is being widely adopted by government statistical agencies throughout the world, including the ABS, as the conceptual basis for compiling their national accounts.<back>
2. For an asset to be included in the national balance sheets, SNA93 states that it must fulfil certain criteria:
  • it must be an "economic asset" over which ownership rights are enforced by institutional units, individually or collectively;
  • it must be an "economic asset" from which economic benefits may be derived by its owner by holding it, or using it, over a period of time. The economic benefits consist of income derived from the use of the asset and the value, including possible holding gains/losses, that could be realised by disposing of the asset or in the case of a financial asset, by extinguishing it.<back>
3. The net present value approach: <back>

The relationship between prices, costs and rates of return is shown by the following formula for the present discounted value of EDR:
Formula shows relationship between prices, costs and rates of return

Where PV0 represents the present value of the EDR;

Nt is the net price per unit allowing for financial (e.g. capital costs and depreciation) and operating costs over period t, where these extraction costs also include a normal return on capital;

qt is the quantity of EDR produced over period t;

r is the discount rate; and

T is the expected mine life.

Therefore This formula represents the future income flow generated over the expected life of the assetrepresents the future income flow generated over the expected life of the asset. Note that by summing from t = 1, the income flow is discounted in the first year.

4. Economic rent is return to the owner of the resource for use of that resource but excludes the costs necessary to replace it. Originally applied to land, it is now generally applied as the return to the owners of any natural resource.<back>

5. The net price method (in relation to subsoil valuation as defined by Landefeld and Hines (1985)), involves calculating the total revenue from extraction, less extraction cost (which should be taken to include a return to produced capital) and dividing this difference by the total quantity extracted in period t. The net price per unit is multiplied by the quantity of remaining resources to obtain a net value. The ABS found estimates derived using the net price approach were inappropriate for valuing future production and they have not been used in the balance sheets. The net price approach results in very high values for subsoil assets, which suggests that the value of future production is being overstated. Although the net price approach has the attraction of simplicity it is the ABS's view that it is unsatisfactory for valuing subsoil assets. In practice, it is not possible to mine all the resource in one year and even if it were possible, the prices for many commodities would be affected by the large supply. In addition, implicit in the net price approach is the assumption that the net economic value of the resource rises each year in line with the rate of interest. There is little evidence to support this assumption.<back>

6. The user cost approach attempts to split the revenue, net of extraction costs, from the sales of a depletable subsoil asset into a capital element (or user cost) and a value added element representing "true income". The capital element represents asset erosion which could be reinvested to generate sufficient future income to maintain the present level of "true income" as the subsoil asset is being depleted and long after the original subsoil asset has been exhausted.<back>

The concept behind the user cost approach is to calculate that part of total receipts attributable to "true income". In practice, a discount rate is applied to the total receipts over the whole life of the resource. This involves calculating the amount of income which would have to be reinvested in each period to maintain the same income in each period while the resource is being used and after it is exhausted. Assumptions have to be made about the life expectancy of the subsoil asset measured in years and the discount rate. The main drawback with the user cost approach is that it does not incorporate unrealised capital gains and losses due to price changes, which is part of the income (See El Serafy 1989).

References

ABARE, Commodity Statistical Bulletin 1993, Commonwealth Government Printer, Canberra, 1993

Australian Bureau of Statistics, Occasional Paper: National Balance Sheets for Australia: Issues and Experimental Estimates 1989 to 1992,
ABS, (cat. no. 5241.0)

Born, A., Development of Natural Resource Accounts: Physical and Monetary Accounts for Crude Oil and Natural Gas Reserves in Alberta, Statistics Canada Discussion Paper, 1992

Bureau of Resource Sciences, Australia's Identified Mineral Resources, Bureau of Resource Sciences, Canberra, 1992

El Serafy, S., "The Proper Calculation of Income from Depletable Natural Resources", in Y.J. Amed, S. El Serafy and E. Lutz, (eds.), Environmental Accounting for Sustainable Development, Washington, D.C., The World Bank, 1989

Landefeld, J. and Hines, J., "National Accounting for Non-Renewable Natural Resources in the Mining Industries", Review of Income and Wealth, no. 31, 1985

McKelvey, V.E., "Mineral Resource Estimates and Public Policy", American Scientist, vol. 60, 1972

Glossary of terms in the McKelvey Box

Identified resources - specific bodies of mineral-bearing material whose location, quantity and quality are known from specific measurement or estimated from geological evidence. Identified resources include economic and sub-economic components.

Measured resources - for which tonnage is computed from dimensions revealed in outcrops, trenches, working and drill holes and for which the grade is computed from the results of detailed sampling. The sites for inspection, sampling and measurement are spaced so closely and the geological character is so well defined, that size, shape and mineral content are well established.

Indicated resources - for which tonnage and grade are computed from information similar to that used for measured resources but the sites for inspection, sampling and measurement are more widespread. The degree of assurance, although lower than for resources in the measured category, is high enough to assume continuity between points of observation.

Demonstrated resources - a collective term for the sum of measured and indicated resources.

Inferred resources - resources for which quantitative estimates are based largely on broad knowledge of the geological character of the deposit and for which there are few, if any, samples or measurements. The estimates are based on an assumed continuity or repetition, of which there is geological evidence. This evidence may include comparisons with deposits of similar type. Bodies that are completely concealed may be included if there is specific geological evidence of their presence.

Economic feasibility - implies that, at the time of determination, profitable extraction or production under defined investment assumptions has been established, analytically demonstrated or assumed with reasonable certainty.

Sub-economic resources - those resources that do not meet the criteria of economic feasibility.

Para-marginal - sub-economic resources that, at the time of determination, almost satisfy the criteria of economic feasibility. Included are resources that would be able to be produced given postulated changes in economic or technological factors.

Sub-marginal - sub-economic resources that would require a substantially higher commodity price or some major cost-reducing advance in technology to render them economic.

To the right of the EDR in Figure 1 are undiscovered resources which consist of inferred, hypothetical and speculative resources. These are economic resources which have not been found. For many subsoil assets their size is almost certainly larger than the EDR.


APPENDIX 1. VALUE OF AUSTRALIA'S DEMONSTRATED MINERAL RESOURCES, BY COMMODITY, AS AT 30 JUNE EACH YEAR

Costs
Rate of discount
Including

Economic
Price
normal
demonstrated
30 June
return on
Mine life
resources
$/unit
capital
Production
(years)
5 per cent
7.5 per cent
10 per cent

Antimony
$M
$M
$M
Kilo-tonne
Tonne
Tonne
Kilo-tonne
1989
15.2
1,607
38
1.83
9
32
26
22
1990
14.5
1,500
35
1.35
9
30
25
21
1991
39.5
1,193
33
1.56
24
24
20
16
1992
63.5
773
30
1.84
39
15
13
10
Average production/mine life
1.64
20.19
Bauxite
Giga-tonne
Tonne
Tonne
Giga-tonne
1989
5.5
130
26
0.04
140
83,063
55,492
41,624
1990
5.6
107
24
0.04
142
66,225
44,243
33.186
1991
6.4
125
23
0.04
160
80,716
53,924
40,448
1992
2.4
95
26
0.04
60
54,715
36,553
27,418
Average production/mine life
0.04
125.22
Black coal- recoverable
Giga-tonne
Tonne
Tonne
Giga-tonne
1989
50.8
51
62
0.15
311
-
-
-
1990
51.1
58
64
0.16
313
-
-
-
1991
51.4
57
61
0.17
315
-
-
-
1992
52.0
56
55
0.18
31.9
2,912
1,941
1,456
Average production/mine life
0.16
314.42
Brown coal - recoverable (a)
Giga-tonne
Tonne
Tonne
Giga-tonne
1989
41.8
na
na
0.05
857
-
-
-
1990
41.7
na
na
0.05
855
-
-
-
1991
41.7
na
na
0.05
855
-
-
-
1992
41.0
na
na
0.05
841
-
-
-
Average production/mine life
0.05
852.31
Cadmium
Kilo-tonne
Tonne
Tonne
Kilo-tonne
1989
58.4
11,192
451
1.97
26
340
268
217
1990
55.7
13,554
417
2.29
25
416
328
266
1991
63.3
6,336
432
2.62
29
187
147
120
1992
50.2
3,289
478
1.99
23
89
70
57
Average production/mine life
2.22
25.68
Cobalt
Kilo-tonne
Tonne
Tonne
Kilo-tonne
1989
18.0
37,610
59,695
2.27
10
-
-
-
1990
85.0
45,503
55,158
1.86
49
-
-
-
1991
80.0
65,273
51,652
1.41
46
381
287
226
1992
53.0
67,536
44,984
1.35
31
631
474
374
Average production/mine life
1.72
34.26
Copper
Mega-tonne
Tonne
Tonne
Mega-tonne
1989
6.5
3,780
2,845
0.28
21
3,777
3,062
2,540
1990
6.7
3,626
2,629
0.31
21
4,029
3,266
2,709
1991
6.9
3,197
2,245
0.33
22
3,847
3,119
2,587
1992
6.5
3,062
2,124
0.34
21
3,789
3,072
2,548
Average production/mine life
0.31
21.25
Diamond-Gem
Million carats
Carat
Carat
Million carats
1989
179.0
57
68
15.61
12
-
-
-
1990
380.0
93
69
15.35
25
5,135
4,085
3,340
1991
569.0
78
68
13.22
37
2,111
1,679
1,373
1992
366.0
219
60
17.81
24
34,210
27
22,251
Average production/mine life
15.50
24.10
Diamond-Industrial
Million carats
Carat
Carat
Million carats
1989
214.0
5
4
20.69
11
348
276
226
1990
487.0
5
4
15.40
25
487
387
316
1991
712.0
8
3
17.53
37
1,227
975
797
1992
458.0
24
5
23.61
24
5,629
4,474
3,656
Average production/mine life
19.31
24.23
Garnet
Mega-tonne
Tonne
Tonne
Mega-tonne
1989
9
94
45
0.03
322
27
18
14
1990
9
94
42
0.03
322
29
19
15
1991
11
94
39
0.02
393
31
21
15
1992
11
94
36
0.04
393
33
22
16
Average production/mine life
0.03
357.24
Gold
Tonne
Kilogram
Kilogram
Tonne
1989
1,486.0
17,373
11,896
185.37
7
8,851
7,926
7,142
1990
2,129.0
17,114
12,357
224.10
10
7,687
6,884
6,203
1991
2,145.0
16,749
13,304
240.77
10
5,567
4,985
4,492
1992
2,466.0
16,046
13,274
241.47
11
4,478
4,010
3,613
Average production/mine life
222.93
9.23
Iron ore
Giga-tonne
Tonne
Tonne
Giga-tonne
1989
14.3
21
7
0.10
132
30,174
20,129
15,097
1990
14.7
25
6
0.11
136
41,040
27,378
20,534
1991
17.9
27
7
0.11
165
42,273
28,201
21,151
1992
17.9
26
7
0.12
165
40,823
27,233
20,425
Average production/mine life
0.11
149.58
Lead
Mega-tonne
Tonne
Tonne
Mega-tonne
1989
11.5
832
1,013
0.49
21
-
-
-
1990
10.7
1,054
945
0.52
20
710
584
490
1991
10
972
795
0.56
19
1,149
945
793
1992
8.9
760
750
0.57
17
67
55
46
Average production/mine life
0.54
19.21
Lithium
Kilo-tonne
Tonne
Tonne
Kilo-tonne
1989
359.1
4,614
337
32.81
9
766
715
670
1990
150.0
4,950
340
47.43
4
826
771
722
1991
160.0
5,264
320
40.38
4
886
827
774
1992
160.0
5,578
278
42.52
4
949
886
830
Average production/mine life
40.78
5.08
Magnesite
Mega-tonne
Tonne
Tonne
Mega-tonne
1989
7.0
44
51
0.20
35
-
-
-
1990
7.0
39
47
0.20
35
-
-
-
1991
7.0
42
45
0.20
35
-
-
-
1992
7.0
45
39
0.20
35
19
14
11
Average production/mine life
0.20
35.00
Maganese ore
Mega-tonne
Tonne
Tonne
Mega-tonne
1989
118.0
84
7
1.92
66
2,612
1,807
1,367
1990
111.0
140
6
2.29
62
4,553
3,151
2,383
1991
110.0
206
6
1.62
62
6,777
4,689
3,546
1992
108.0
210
6
1.31
61
6,928
4,794
3,625
Average production/mine life
1.78
62.72
Mineral sands-Ilimenite
Mega-tonne
Tonne
Tonne
Mega-tonne
1989
64.2
75
50
1.69
40
749
525
399
1990
80.7
83
47
1.65
50
1,076
754
573
1991
102.4
85
57
1.48
64
829
581
441
1992
111.8
80
50
1.59
70
900
631
479
Average production/mine life
1.60
55.98
Mineral sands-Rutile
Mega-tonne
Tonne
Tonne
Mega-tonne
1989
9.4
667
415
0.25
43
1,024
723
551
1990
11.6
768
383
0.24
53
1,563
1,104
841
1991
11.7
732
631
0.22
53
411
290
221
1992
13.5
579
549
0.18
61
123
87
66
Average production/mine life
0.22
52.50
Mineral sands - Zircon
Mega-tonne
Tonne
Tonne
Mega-tonne
1989
15.2
536
392
0.51
37
1,045
755
581
1990
18.0
658
362
0.48
44
2,143
1,548
1,192
1991
19.3
517
429
0.34
47
634
458
353
1992
20.3
319
347
0.31
50
-
-
-
Average production/mine life
0.41
44.55
Nickel
Mega-tonne
Tonne
Tonne
Mega-tonne
1989
1.1
18,119
13,730
0.06
17
4,889
3,604
2,805
1990
3.0
12,468
12,686
0.07
46
-
-
-
1991
3.4
11,155
11,889
0.07
52
-
-
-
1992
2.7
9,891
10,354
0.06
41
-
-
-
Average production/mine life
0.07
38.93
Petroleum (recoverable) - Crude Oil
Giga-litre
Kilolitre
Kilolitre
Giga-litre
1989
260
120
144
25.57
9
-
-
-
1990
264
147
133
28.74
10
2,974
2,653
2,382
1991
285
203
123
28.66
10
16,569
14,780
13,271
1992
258
181
112
27.78
9
14,359
12,809
11,501
Average production/mine life
27.69
9.63
Petroleum - Natural Gas
Billion m3
'000 m3
'000 m3
Billion m3
1989
953
50
31
15.77
48
6,796
4,924
3,798
1990
853
59
29
20.08
43
10,622
7,697
5,937
1991
691
65
26
20.74
35
13,724
9,945
7,670
1992
950
65
23
22.56
48
14,773
10,705
8,256
Average production/mine life
19.79
43.55
Petroleum - Condensate
Giga-litre
Kilolitre
Kilolitre
Giga-litre
1989
114
120
144
2.68
36
-
-
-
1990
78
147
133
3.25
24
740
557
439
1991
118
203
123
3.29
37
4,120
3,102
2,444
1992
124
181
112
3.53
39
3,571
2,388
2,118
Average production/mine life
3.19
34.03
LPG naturally occurring
Giga-litre
'000 m3
'000 m3
Giga-litre
1989
119
74
32
3.76
32
2,485
1,880
1,485
1990
106
76
30
3.79
29
2,717
2,056
1,625
1991
129
116
27
3.55
35
5,240
3,964
3,133
1992
131
109
24
3.59
36
5,007
3,788
2,993
Average production/mine life
3.67
33.03
Platinum group (T,PT,PD)
Tonne
Kilogram
Kilogram
Tonne
1989
na
22,254
12,932
0.07
na
-
-
-
1990
22.8
21,443
12,760
0.07
260
15
10
8
1991
19.0
16,948
11,956
0.09
217
9
6
4
1992
17.0
17,508
10,413
0.13
194
12
8
6
Average production/mine life
0.09
167.52
Rare earths (REO, Y203)
Kilo-tonne
Tonne
Tonne
Kilo-tonne
1989
360.0
854
79
10.39
38
117
89
70
1990
300.0
933
73
13.43
32
130
98
78
1991
300.0
300
68
3.83
32
35
27
21
1992
300.0
300
60
7.04
32
36
28
22
Average production/mine life
9.42
33.43
Silver
Kilo-tonne
Kilogram
Kilogram
Kilo-tonne
1989
21.8
234
119
1.09
19
1,489
1,244
1,057
1990
20.7
217
110
1.10
18
1,386
1,158
984
1991
19.2
180
99
1.14
17
1,055
882
749
1992
17.0
181
90
1.25
15
1,177
984
836
Average production/mine life
1.15
17.18
Talc
Mega-tonne
Tonne
Tonne
Mega-tonne
1989
5.0
60
73
0.21
25
-
-
-
1990
7.0
62
76
0.23
35
-
-
-
1991
9.0
65
74
0.17
45
-
-
-
1992
11.0
70
71
0.18
55
-
-
-
Average production/mine life
0.20
40.16
Tantalum
Kilo-tonne
Kilogram
Kilogram
Kilo-tonne
1989
11.4
76
64
0.44
19
74
63
55
1990
11.4
86
64
0.44
19
132
113
98
1991
6.0
98
60
0.70
10
227
194
168
1992
5.9
116
53
0.87
10
388
332
288
Average production/mine life
0.61
14.14
Tin
Kilo-tonne
Tonne
Tonne
Kilo-tonne
1989
191.4
15,822
11,690
7.19
28
372
300
247
1990
143.2
11,624
10,802
8.19
21
74
60
49
1991
165.5
9,320
10,121
5.67
24
-
-
-
1992
99.7
10,207
8,816
6.21
15
125
101
83
Average production/mine life
6.81
22.12
Tungsten ore
Kilo-tonne
Tonne
Tonne
Kilo-tonne
1989
18.5
48
83
1.39
21
-
-
-
1990
5.4
45
79
1.21
6
-
-
-
1991
5.1
43
74
0.69
6
-
-
-
1992
1.1
38
65
0.16
1
-
-
-
Average production/mine life
0.86
8.70
Uranium
Kilo-tonne
Kilogram
Kilogram
Kilo-tonne
1989
474.0
79
49
4.51
109
2,604
1,744
1,309
1990
469.0
70
45
4.09
108
2,187
1,465
1,099
1991
474.0
54
41
4.39
109
1,080
723
543
1992
462.0
52
36
4.35
107
1,406
941
706
Average production/mine life
4.33
108.41
Zinc
Mega-tonne
Tonne
Tonne
Mega-tonne
1989
20.4
2,340
1,959
0.77
22
4,233
3,483
2,922
1990
17.9
2,378
1,810
0.87
20
6,311
5,193
4,357
1991
16.9
1,656
1,574
1.00
18
914
752
631
1992
15.0
1,837
1,702
1.02
16
1,504
1,238
1,039
Average production/mine life
0.91
19.19



Feature Article - Valuing Australia's Natural Resources - Part 2 October Issue 1995



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