Note: Data Cube "Commodities Produced" has been re-issued on 27/11/06 due to the data in the 2004-05 Queensland Construction Materials section being revised.
ABOUT THIS PUBLICATION
This publication presents estimates from the annual Economic Activity Survey, of the economic and financial performance of the Australian mining industry for 2004-05 together with data on a comparable basis from 2001-02 and intervening years.
Details of Australia's mining commodities produced shown in Chapter 4 are obtained from the various state and Northern Territory government departments responsible for the collection of these statistics. See Explanatory Notes paragraphs 38-41 for more detail.
CHANGES TO THIS PUBLICATION
Estimates in this publication of the value of mineral commodity production are presented using a new framework for categorising products of the mining industry. Summary data for each state and the Northern Territory are shown on this basis, in a time series starting from 2001-02.
Estimates for earlier years have been revised since the previous issue of this publication. The revisions are incorporated in this publication and in the extended data spreadsheets available free on-line.
The effect of these revisions on the 2003-04 national estimates of key variables for the Mining industry has been a decrease of 0.6% (or $338m) in sales and service income, an increase of 0.04% ($3m) in wages and salaries paid, and an increase of 0.1% ($30m) in industry value added. Effects may be greater at lower levels of the industry classification and/or for other variables.
INFORMATION AVAILABLE ON-LINE
The text components of this publication are available free on-line. A PDF publication and extended data spreadsheets are also available free on-line.
Other information is also available via the Mining Statistics theme page. To access the theme page, go to the ABS web site home page <http://www.abs.gov.au>. Access the Themes page by either opening the Themes hotlink from the top menu bar or opening the Industry hotlink shown under Themes, in the left-side navigator. Then open the Mining hotlink shown under Industry.
For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or John Ridley on Sydney (02) 9268 4541.
CHAPTER 1 SUMMARY
This publication presents estimates, from the annual Economic Activity Survey, of the economic and financial performance of the Australian mining industry.
This industry is specified in Division B of the Australian and New Zealand Standard Industrial Classification (ANZSIC), 1993 edition. Please see paragraph 2 of the Explanatory Notes for a full definition.
Table 1.1 presents a time series for selected items, from 2001-02 to 2004-05. All value data in this table are shown at current prices.
In each of the four major aggregates presented, the Australian mining industry showed significant growth in 2004-05 when compared to 2003-04. Sales and service income increased by 18% and industry value added increased by 16%, while employment and wages and salaries both increased by 7%. Commentary on these items is presented in Chapter 2.
For information about survey methodology, see Technical Note 1.
The Glossary provides definitions for terms used.
GROSS VALUE ADDED
Table 1.2 illustrates the growth of Australian industries over time using chain volume measures of their gross value added. Chain volume measures take into account the effects of price changes.
Of the seventeen industries shown in table 1.2, Mining recorded the fourth highest growth (4.9%) in 2004-05. It ranked fourteenth in its average annual growth rate over the past 10 years and fifth over the past 25 years, with increases of 2.6% and 3.9% respectively. By comparison, the highest growth rates were recorded by Communication services, with annualised rates of 5.9% and 7.0% for the 10 year and 25 year periods. Cultural and recreational services recorded the highest growth rate in 2004-05, of 7.9%.
CHAPTER 2 FINANCIAL OPERATIONS
Statistics in this Chapter relate to all subdivisions of the mining industry as classified by the Australian and New Zealand Standard Industrial Classification (ANZSIC) 1993 edition. These data are presented at the ABN unit / TAU level (see the Glossary for definitions) and, therefore, can contain data about activities normally associated with industries other than mining. Explanatory Notes paragraphs 6-21 provide further details. The commentary refers mainly to the tables in this chapter, as well as to the employment data presented in table 1.1.
The Minerals Council of Australia's Minerals Industry Survey Report, 2005 reported that average US dollar world mineral prices rose by 33% in 2004-05. Average prices for most mineral commodities increased significantly compared to the previous year, largely the result of economic growth in Asia, particularly China. However, US dollar price gains were moderated in Australian dollar terms due to the appreciation of the Australian dollar by around 6%. Reserve Bank of Australia data shows a 24% increase in the Australian dollar non-rural commodity price index for 2004-05. This compares to a 5% fall in 2003-04, when a 22% appreciation of the Australian dollar exceeded increases in the US dollar prices of minerals.
As reported in ABARE's Australian Mineral Statistics, mine production volume increased by around 5% in 2004-05. Export volumes and revenue also increased for most minerals. Export earnings for black coal rose by 57%, reflecting increases of 45% in the average Australian dollar export price of steaming coal and 48% for coking coal. The volume of coking coal exported increased by 12%, while exports of steaming coal remained steady.
Iron ore export earnings increased by 54%. The volume of iron ore exported increased by 17% and the average Australian dollar export price increased by 31%, partly reflecting the outcome of iron ore price negotiations announced in January 2005.
Crude oil export earnings increased by 25% in 2004-05. A 12% decline in production, attributed mainly to the natural depletion of mature fields, and appreciation of the Australian dollar, were offset by increased prices. Strong global demand, rapid growth in consumption by newly industrialised countries and uncertainty of supply resulted in the world trade weighted average price of crude oil being $US54.77 per barrel in 2004-05. This represented an increase of 40% over 2003-04, and an increase of 33% in Australian dollar terms. In contrast to crude oil, natural gas production increased by 12% during 2004-05. The export volume of LNG rose by 34% and export revenue by 47%. Commissioning of the North West Shelf LNG train 4 was completed in August 2004.
Higher average US dollar prices for uranium (up 49%), lead (up 38%), copper (35%), nickel (22%) and zinc (22%), contributed to increased export earnings for these commodities.
It should be noted that a number of large mining businesses report in the Economic Activity Survey for financial years ending on dates other than 30 June. For this reason, these changes in market conditions may not be directly reflected in the data of financial and economic performance. See Explanatory Notes paragraphs 22 and 23, where the contribution of such businesses is quantified.
SALES AND SERVICE INCOME
Sales and service income for total mining was $71.0b in 2004-05, an increase of $10.7b (18%) over the previous year. Sales and service income for the 'core' mining industries of Coal mining, Oil and gas extraction, and Metal ore mining increased by $10.9b (22%) to $61.2b in $2004-05.
Major contributors to the increase were Coal mining, Oil and gas extraction, and Iron ore mining. The only decrease, from among the industries presented, was a 6% ($ 234m) decline for Other mining.
The largest contributor to sales and service income was Coal mining at $20.3b. This was an increase of $5b (or 32%). According to ABARE, average coal prices rose significantly in 2004-05 (coking coal by 48% and steaming coal by 45%). Prices were not as favourable for businesses reporting for the year ended 31 December 2004 (see Explanatory Notes paragraphs 22 and 23 for more details), when the average price of steaming coal increased by 32% and coking coal by only 9%.
Sales and service income for the Oil and gas extraction industry increased by $2.0b (13%) to $17.8b, despite declining crude oil production. The US dollar world trade weighted average price of crude oil increased by 40% in 2004-05. The effect of this increase was tempered by a 6% appreciation of the Australian dollar. Businesses reporting for the 2004 calendar year experienced less buoyant market conditions, with a 27% increase in the US dollar price of oil being significantly eroded by a 12% appreciation of the Australian dollar. For the first time in the four years covered by these data, Coal mining's sales and service income exceeds that of Oil and gas extraction.
Iron ore mining recorded the largest percentage increase in sales and service income (35%, or $2.1b). The average Australian dollar export price for iron ore increased by 31% in 2004-05. ABARE reported a 17% increase in the volume of iron ore exports.
INDUSTRY VALUE ADDED
In 2004-05, national production of the mining industry as measured by IVA increased by $5.5b (16%) to $39.9b. Coal mining was the largest source of the increase, its IVA rising by $3.5b (53%). IVA of Iron ore mining increased by $1.2b (from $3.7b, up 34%). The only mining industries shown in which IVA decreased in 2004-05 were Gold ore mining (down 28% to $1.5b) and Other mining (down 24%, to $1.4b).
Contributing 36% (or $14.3b), the Oil and gas extraction industry was the most significant source of IVA in 2004-05.
In terms of IVA components, the main source of the increase in IVA for total mining was a $10.7b (18%) increase in sales and service income. Propelled by higher prices received for several major commodities, this increase more than doubled the $5.0b (26%) increase in other intermediate input expenses. Purchases of goods and materials rose by 5% ($0.4b). The increase in other intermediate input expenses reflected principally an increase of $3.5b (46%) in other selected expenses, as well as smaller increases in most other component items.
Employment in the Australian mining industry at the end of June 2005 was estimated at 93,100 persons, an increase of 7% (or 6,100 persons) compared to the estimate for June 2004. The major sources of this increase were Coal mining (up by 2,500 persons), Metal ore mining (by 2,000 persons) and Services to mining (by 1,300 persons). Employment increased in all constituent industries for which data are shown, except for Other mining which decreased slightly. Employment in the 'core' mining industries of Coal mining, Oil and gas extraction and Metal ore mining increased by 9% overall.
At the industry subdivision level, 23% of mining employment at the end of June 2005 was in Coal mining, 9% in Oil and gas extraction, 30% in Metal ore mining, 12% in Other mining, and 27% in Services to mining. These proportions are quite stable over the four years presented in table 1.1.
The mining industry employed 12% (or 10,200) more people at the end of June 2005 compared to four years earlier. Coal mining (where employment grew by 37% over this period) accounted for 5,900 of this increase, and Metal ore mining a further 3,900 (a 16% increase over 2001-02).
WAGES AND SALARIES
The Australian mining industry paid $7.5b in wages and salaries in 2004-05, an increase of 7% (or $494m) on the previous year. All industries for which data are shown incurred higher wages and salaries costs than in 2003-04. The 'core' mining industries of Coal mining, Oil and gas extraction and Metal ore mining recorded a 6% ($304m) increase in wages and salaries overall.
At the industry subdivision level, 27% of the value of wages and salaries for total mining in 2004-05 were paid in Coal mining, 12% in Oil and gas extraction, 30% in Metal ore mining, 7% in Other mining, and 24% in Services to mining. As with their shares of employment, these proportions are quite stable over the four years presented in table 1.1.
Because employment and wages and salaries paid increased by the same percentage at the total mining level, the estimate of wages and salaries per person employed was unchanged, at $80,000, between 2003-04 and 2004-05. A 5% ($4,000) increase for Metal ore mining was outweighed by a decrease of 12% ($12,300) in the value for Coal mining.
It should be noted that employment is measured at a point in time, i.e. end of June 2005, whereas wages and salaries relate to a twelve month period. In times of significant change in the performance of the industry, as is the case in 2004-05, changes in wages and salaries may not be as great as changes in employment. This will be exacerbated by the effect of those businesses (refer paragraphs 22 and 23 of the Explanatory Notes) that report on a December year end basis, where employment will be reported as at June 2005 while wages and salaries will be in respect of the twelve months ended December 2004.
Unlike in 2003-04, the value of contract mining expenses ($2.3b) was less than selected labour costs ($2.5b) in Metal ore mining. This implies greater use of employed rather than contract labour during 2004-05. Across the mining industry, about 90% of the value of selected labour costs is represented by wages and salaries.
PROFITABILITY AND EARNINGS
Total trading profit for the mining industry in 2004-05 was $37.6b, an increase of $5.9b (19%) over the previous year. The main contributors to this improved result were Coal mining, where trading profit rose by $3.7b (or 62%), and Iron ore mining, which recorded an increase of $1.3b (or 37%). Gold ore mining, Other mining and Services to mining were the only industries in which trading profit fell, by 28%, 22% and 3% respectively. Trading profit in Gold ore mining was depressed by an increase of $1.0b in other selected expenses.
Earnings Before Interest and Tax (EBIT) rose more strongly, by 26% or $4.9b. Again, the largest increases in dollar terms occurred in Coal mining and Iron ore mining.
In terms of Operating Profit Before Tax (OPBT), the mining industry improved its returns by 31% (or $5.0b) during 2004-05, earning $21.0b. An increase of $10.4b (16%) in total income substantially exceeded the $5.9b (12%) increase in total expenses. Coal mining was responsible for $3.0b of the increased OPBT, and a further $1.2b was attributable to Iron ore mining.
Net capital expenditure by the mining industry in 2004-05 was $14.2b, which was 23% ($2.6b) higher than the previous year. The largest increase occurred in Coal mining (up $1.4b, or 93%), which dominated a diversity of movements in the other mining industries.
By asset type, the increase reflected outlays on plant, machinery and equipment (up $0.2b, or 3%), dwellings, other buildings and structures (up $1.5b, or 33%) and other assets (up $1.2b, or 33%).
INDUSTRY PERFORMANCE MEASURES
A range of performance measures, mainly expressed as ratios, can be produced from the data available from businesses' financial statements. A selection of these are presented in this Chapter for the various mining industries. Information about the uses and limitations of these measures can be found in Explanatory Notes paragraphs 27-32.
The following summarises the mining industry's performance ratios for 2004-05, which appear in detail in table 2.5:
- The highest profit margin (52%) was earned by Oil and gas extraction. Gold ore mining was the lowest (-8%). The profit margin of the Coal mining industry almost doubled between 2003-04 and 2004-05, and the profitability of Copper mining and Silver-lead-zinc mining also substantially improved. Note that this ratio is based on OPBT, whereas previous issues of this publication presented trading profit margin.
- The interest coverage ratios of most of the industries presented improved between 2003-04 and 2004-05, the exceptions being Gold ore mining, Other mining and Services to mining.
- The highest value of IVA to selected labour costs occurs in the Oil and gas extraction industry, where IVA exceeds selected labour costs by 14.5 times. This is almost identical to 2003-04 and is almost double the next highest value, which relates to Iron ore mining. The Services to mining industry shows the lowest value (1.3 times) for this ratio.
- Of all mining industries shown, Oil and gas extraction (at $122,200) recorded the highest selected labour costs per person employed, followed by Coal mining ($106,500). For total mining, the estimate was stable.
- Gold ore mining was the only mining industry in which acquisition of assets exceeded IVA, resulting in an investment rate (value added) of greater than 100% in both 2003-04 and 2004-05. In 2004-05 Services to mining recorded the next highest value, at 61.6%.
PROFIT MARGIN, selected industries (a)
CHAPTER 3 STATE / TERRITORY SUMMARY
This chapter contains key data of industry performance at the state and territory level, together with data illustrating the contribution of the mining industry in each state and territory. Data for the Australian Capital Territory are included with those for New South Wales and are not available separately. For convenience, the combined estimates are designated as New South Wales data in the commentary below.
The above graphic illustrates each state or territory's share of Australian economic aggregates relating to Selected mining in 2004-05.
Table 3.1 presents a time series for selected items for all states and the Northern Territory, from 2001-02 to 2004-05. The data relate to the industry designated as 'Selected mining', that is, ANZSIC subdivisions 11-14 (Coal mining, Oil and gas extraction, Metal ore mining and Other mining) only. ANZSIC subdivision 15 (Services to mining) is excluded from the data in this table, because the design of the survey does not support production of data at the state and territory level for this industry. See Explanatory Notes paragraphs 33 and 34 for an outline of the methodology used in deriving these estimates.
SALES AND SERVICE INCOME
Between 2003-04 and 2004-05, sales and service income of the Selected mining industry increased in all states and territories apart from Victoria, where it fell for the third consecutive year. Western Australia recorded the largest increase, rising $4.3b (18%) to $28.8b. Sales and service income in Queensland rose by a higher percentage (34%) but by a slightly smaller amount ($4.1b). Other large increases occurred in Tasmania (up 30%, or $0.1b), South Australia (up 29%, or $0.6b) and New South Wales (up 21%, or $1.8b).
Over the period from 2001-02 to 2004-05, only Victoria and the Northern Territory recorded decreases in the sales and service income of Selected mining. The largest absolute increase occurred in Western Australia ($7.1b), and the largest percentage increase was in South Australia (58%). These increases over time have largely been concentrated in the most recent year. Typical increases in 2004-05 have been as much as double those of 2002-03 (in dollar terms), separated by a year of lesser or negative growth in 2003-04. Victoria's decrease of $1.9b from 2001-02 to 2004-05 exceeded that of the Northern Territory ($896m), but in percentage terms they were very similar (at about 30%).
In 2004-05, Western Australia accounted for 44% of sales and service income of the Selected mining industry, followed by Queensland at 25% and New South Wales at 16%. Victoria contributed 6%, down from 8% in 2003-04, and Queensland's share increased from 23%.
INDUSTRY VALUE ADDED
Movements in sales and service income between 2003-04 and 2004-05 have generally been accompanied by changes in IVA in the same direction. IVA for Selected mining in Queensland increased by $3.4b (or 60%) to $8.9b. Victorian IVA for Selected mining in 2004-05 was 16% (or $0.5b) less than in 2003-04, and the Northern Territory's declined by 17% ($0.3b).
A 13% ($4.3b) increase nationally in Selected Mining IVA over the period from 2001-02 to 2004-05 is the product of substantial increases in Queensland ($3.0b) and Western Australia ($2.9b), smaller increases in New South Wales, South Australia and Tasmania, and major decreases in Victoria ($2.0b) and the Northern Territory ($1.2b).
In 2004-05, Western Australia's $18.2b of industry value added represented 49% of the Australian total for Selected mining. Queensland (24%) was the next largest contributor followed by New South Wales ($11%). The proportion of national IVA accounted for by Victoria fell from 11% to 8% between 2003-04 and 2004-05. In the four years from 2001-02 to 2004-05, Victoria's contribution to the Australian estimate of IVA for this industry has nearly halved, from 15%.
The Selected mining industry increased employment between 2003-04 and 2004-05 in all states and territories except the Northern Territory, gaining 8% nationally. Employment increased most strongly in Queensland (2,070 persons, or 12%), followed by Western Australia (1,319 persons, or 6%). The additional 111 persons employed in Tasmania at the end of 2004-05 represented an increase of 10%. Selected mining reduced its employment by 6% in the Northern Territory.
Over the period from 2001-02 to 2004-05, the biggest increase in employment in Selected mining occurred in Queensland (4,670 persons, or 33%), followed by Western Australia (3,825 persons, or 18%) and New South Wales (1,925 persons, or 15%). Compared to June 2002 there were 150 (or 11%) fewer persons employed in Selected mining in Tasmania, and marginally fewer in Victoria, at the end of June 2005.
In 2004-05, 36% of employment in the Selected mining industry was recorded against Western Australia, followed by Queensland with 27%; New South Wales contributed 22% of the total. This pattern differs from the shares of sales and service income and IVA among the major states as outlined above, largely reflecting differing labour intensities in the types of mining predominant in each state and territory.
COMPARISON ACROSS INDUSTRY
Table 3.2 shows the contribution of industries to the production (as measured by total factor income) of each state and territory, as well as Australia, in 2004-05. For the purposes of this table, the activity of general government and the ownership of dwellings are each treated as industries.
In 2004-05, the largest share of production on this basis was contributed by Property and business services, which generated 12.8% of total factor income. Of the nineteen industries shown, Mining ranked eighth nationally, contributing 5.4%. Its share of total factor income varied markedly among the states and territories. Mining was by far the dominant industry in the Northern Territory - where, at 20%, its share of total factor income is more than twice that of the next largest industry - and in Western Australia. In Queensland it ranked equal third.
CHAPTER 4 COMMODITIES PRODUCED
This Chapter presents information about mineral production in Australia based on data produced by the various state and Northern Territory government departments as part of their administrative responsibilities.
This edition presents these data in accordance with a new framework for categorising the products of the mining industry. This framework has been developed by the ABS, in consultation with industry sources and major users of the data, with a view to standardising the data collected by the various jurisdictions.
Commodity data are presented at the broadest level of this framework, for each year from 2001-02 to 2004-05, for each state and the Northern Territory. More detailed time series data are available, free of charge, on the ABS website.
To access the commodity data, go to the ABS home page <http://www.abs.gov.au>. Select the 'Access to all ABS products & statistics' from the 'All Statistics' tab menu bar on the left hand side. On the 'Statistics' page, choose 'By Catalogue Number' under 'All Statistics'. Find 8415.0 for 2004-05; the detailed commodity Excel spreadsheets are located under the 'Details' tab.
The four broad categories of the new commodities framework are fuel minerals, metallic minerals, construction materials, and industrial minerals. These resemble, in name and general content, the major categories used previously: coal, oil and gas; metallic minerals; construction materials; and other non-metallic minerals. The main changes at this level are that the industrial minerals category now includes a number of commodities that were previously not part of the corresponding category Other non-metallic minerals:
Any comparisons with data compiled under the former classification should take these changes into account. A complete list of the items constituting each of these broad categories is provided in the Appendix.
- peat (previously shown under coal, oil and gas),
- dimension stone (previously shown under construction materials)
- mineral sands, tantalum, lithium, chromite and iron oxide (previously shown under Metallic minerals).
Readers should exercise caution when using mineral commodity data, as:
Footnotes have been provided in the spreadsheets to clarify definitions, and highlight those areas where treatment or data availability vary across jurisdictions. Any offshore production is attributed to the state or territory which controls that particular offshore area or administers it on behalf of the Australian Government. Data relating to the Joint Petroleum Development Area, in the Timor Sea, is included with that of the Northern Territory.
- definitional requirements vary, as does the range of commodities upon which royalties are payable: the different jurisdictions do not necessarily apply common definitions and standards when compiling the statistics;
- significant variations exist between jurisdictions in the way in which value of production is attributed, particularly for metallic minerals. ABS estimates based on applying a market price to the metallic content (recoverable metal) have been used where possible to obtain a valuation as close as possible to the concept of production.
- the level of information available for construction materials and other non-metallic minerals varies considerably. Production and value of construction materials may be understated in several states, because royalties are not always collected and/or the activity occurs on private land.
No data are recorded in this chapter for the Australian Capital Territory.
For further information, see Explanatory Notes paragraphs 38-41. Paragraph 41 also includes website and publication details of the sources.
The recorded value of mineral production for Australia was $66.8b for 2004-05 (subject to the qualifications described above). This is an increase of $16.2b (or 32%) on 2003-04.
In 2004-05 Fuel minerals accounted for 55% (or $37.1b) of the total value of Australian mineral commodities produced, followed by Metallic minerals (38%, or $25.7b), Industrial minerals (4%, or $2.7b) and Construction materials (2%, or $1.4b).
STATE / TERRITORY COMPARISON
Over the period from 2001-02 to 2004-05, the largest Australian mineral commodity producer was Western Australia, which accounted for 45% of the value of production in 2004-05. Queensland was the second highest contributor (25% in 2004-05), with New South Wales (14% in 2004-05) consistently ranked third.
Western Australia recorded the highest contribution to the Metallic minerals and Fuel minerals categories: 62% (or $16.0b) and 34% ($12.5b) of the Australian totals respectively. Of the $16.2b increase in the value of mineral production during 2004-05, $6.4b was attributable to Western Australia and $5.1b to Queensland. With an increase of $4.1b, Queensland dominated the national increase of $10.7b in the value of Fuel minerals. Western Australia was the major source of the $5.3b national increase in value of Metallic minerals, having produced an additional $3.4b in this category. Its contribution to the increase in value of Metallic minerals was more than three times the size of the next largest contributor, Queensland (up $1.0b).
The value of mineral commodities produced increased from 2003-04 to 2004-05 in all seven jurisdictions. Western Australia recorded the largest increase, of $6.4b (or 27%), reflecting large increases in Metallic minerals ($3.4b) and Fuel minerals ($3.0b). Queensland's increase was $5.1b (or 44%), and the value for New South Wales rose by $2.5b (or 37%).