Since its genesis in the mid-2000s, Australia’s mining boom has had many different effects on other industries and the Australian public at large. The value of the Australian dollar was boosted, the country survived the financial crisis that crushed other economies and many new jobs were created. On the other hand, the increased value of the dollar meant that certain exporting segments were negatively impacted and the benefits of the boom were not evenly spread amongst the states. This article looks at five industries that have benefitted and why:
1. Tourism
World-famous beaches, an enviable climate and friendly locals mean that Australia’s tourism industry has a lot to work with. However, when the mining boom erupted, the industry benefitted from increased business travel to mining areas and its reported link to increased national income. As capital cities and mining regions received an influx of workers and visitors, local accommodation providers and domestic airlines enjoyed a modest surge in sales. Given the global financial struggle, the relative ease at which Australia stayed afloat was important for consumer confidence and spending.
2. Construction
One industry that has obviously benefitted from the boom is the construction industry. From mines to houses and from canteens to retail businesses, entire communities were sometimes built from scratch and the number of construction contracts that were created skyrocketed. Companies such as MacMahon (CEO Ross Carroll) and MCG Properties (CEO Tony Addinsall) are examples of businesses that are involved in both construction and mining.
3. Property Development
As mentioned above, the number of private housing and corporate building projects in newly created mining towns was phenomenal at the start of the mining boom. Behind the scenes, as such, were the property development companies that initiated the planning process and made the necessary investments. Property development companies such as Mirvac (CEO Susan Lloyd-Hurwitz) and HomeCorp (CEO Ron Bakir) are two examples of businesses that saw the potential in getting involved with mining towns.
4. Minerals Exporting
While the mining boom had primarily adverse effects for many trade-based businesses (especially those that faced much competition), the minerals exporting industry greatly benefitted. Sustained demand from Asian countries such as China and Japan and a stronger Australian dollar meant that Australian resources were being sold for an inflated price (almost triple). Increased profits were enjoyed by minerals companies such as Rio Tinto (CEO Sam Walsh) and Newcrest Mining (CEO Greg Robinson).
5. Oil and Gas
Often working side-by-side with mining companies are the businesses that specialise in oil and gas exploration. With the advent of the mining boom and subsequent increase in the construction of mines, these oil and gas companies also experienced an increase in their number of projects and contracts. Dealing with oil, coal and natural gas, companies such as Arrow Energy (CEO Andrew Faulkner) and Chevron Australia (Managing Director Roy Krzywosinski) are a few examples of businesses that have benefitted.
While the debate around the mining boom and its perceived effects is often contentious, it’s obvious that certain industries within the Australian economy have undoubtedly benefitted. Businessmen such as Ross Carroll, Ron Bakir, Sam Walsh and Andrew Faulkner will certainly testify to that. What are your thoughts on the matter? Let us know by leaving a comment below.
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