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EMPIRICAL DECOMPOSITION OF MINING INDUSTRY GROSS OPERATING SURPLUS
Table 2 presents the modelled Mining GOS results derived from the mineral and energy resources valuation model using the steps illustrated in Table 1. The modelled GOS in Table 2 is then compared to the mining GOS published in the ASNA to verify the accuracy of the model. Theoretically, the ASNA should have the same result as that derived from the mineral and energy resources model. In practice, the results differ due to differing data sources, scope and price assumptions. Nevertheless, taking into account these differences, the results should be broadly comparable.
TABLE 2. MINING GOS DERIVED FROM RESOURCES VALUATION MODEL ($MILLION), 2005-06 TO 2012-13 (CURRENT PRICES)
Official estimates of GOS as published in the ASNA are constructed by subtracting estimates of compensation of employees (COE) from estimates of mining industry value added (IVA). The scope of GOS in the ASNA is greater than the scope GOS as estimated by the resource valuation model as ASNA GOS includes exploration and mining support services. From 2005-06 to 2012-13, exploration and mining support services made up on average 8.0% of the ASNA mining IVA. Therefore it is expected that the GOS estimates derived from the valuation model should be lower than the ASNA estimates by around 8.0%. Figure 1 shows that from 2005-06 onwards, the mineral and energy resources estimates are in line with expectations, on average 8.2% below the ASNA GOS estimates.
FIGURE 1 MINING GOS COMPARISON, 1989-90 TO 2012-13 (CURRENT PRICES)
The other main differences are due to the mineral and energy resources model using five-year averages of prices, costs and production, which has reduced the volatility of mineral and energy resources GOS in recent years. Price movements that the mineral and energy resources model has smoothed can be seen in Figure 2. Mining Industry Export Price Index from ABS publication International Trade Price Indexes (cat. no. 6457.0). Other differences are due to ASNA estimates covering all minerals within the SNA 2008 production boundary, and the mineral and energy resources estimates only including the 27 minerals listed earlier.
FIGURE 2. ABS MINING EXPORT PRICE INDEX, 1989-90 TO 2012-13, REFERENCE YEAR 2011-12
The review into the mineral resource valuation model has also improved the suitability of resource rent (return to natural capital plus depletion) as an indicator of mineral and energy resource services since updated estimates of resource rent now correspond more closely with mining income data from alternative sources. When estimated in real terms, resource rent provides an indicator of mineral and energy resource services that can be used for productivity estimation.
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