Mining Industry Got Australia Through Economic Recessions, Pandemic: Liberal MP

In 2020, more than 60 percent of China's iron ore imports came from Australia. This picture shows Fortescue Solomon iron ore mine located in the Valley of the Kings in the Pilbara region of Western Australia. (David Gray/Reuters)

Queensland Liberal MP Garth Hamilton has commended Australia’s mining sector for sustaining the nation’s economic prosperity during the 90s recession, the GFC, and more recently through the pandemic.

This comes as federal Labor Treasurer Jim Chalmers said that Australia’s resources sector has been “a force for good.”

Speaking with Sky News on June 26, Hamilton said while the current policies by the federal environment minister have been a drawback to mining growth, it’s the mining industry that got Australia through tough economic times.

“When everything else went to custard, this is the industry that held up. It’s the industry that got us through the Great Financial Crisis (GFC), it’s the industry that got us out of the 90s recession that we had to have—it’s always been there for us,” he said.

“Australia’s got a great history of providing exactly what we need, not just to build ourselves, but across the world relies on us.”

Meanwhile, federal, state, and territory leaders have expressed support for Australia’s critical minerals sector after a roundtable meeting on the sidelines of the 26th World Mining Congress in Brisbane.

“Through the Resources Ministers’ Roundtable, we are working to build a common understanding of how governments can maximise these opportunities for the benefit of all Australians,” Federal Resources Minister Madeleine King said on June 26.

“The Australian Government is committed to working with the states and territories to boost the development of our critical minerals sector and create new jobs in processing those minerals into materials that are crucial for the clean energy future.”

This follows King’s release of the Critical Minerals Strategy (pdf) that aims to make Australia a global producer of raw and processed critical minerals by 2030.

Mining Industry During the 90s Recession, GFC and Pandemic

In the early 1990s, Australia entered what was labelled the “recession that we had to have” by then-Labor PM Paul Keating. The economic downturn saw the Australian economy fall into a severe recession, with interest rates hiking to 17 percent, unemployment peaking at 11 percent, bankruptcies rising by 30 percent, and almost 10,000 Australians seeking unemployment benefits in just one week.

According to a research paper by David Gruen and Glenn Stevens (pdf), the recovery from the recession began in the September quarter of 1991. A contributing factor to this recovery was productivity growth, particularly in unexpected industries, one of which was mining.

Additionally, the annual growth rate of Australia’s three largest mining sectors—iron ore, coal, and oil and gas—grew at an average rate of 4.3 percent from 1991-1992 and 2017-2018. Coal mining grew annually at 4.8 percent, while iron ore mining grew at an average rate of nine percent.

During 2005, Australia experienced a mining boom, which was largely due to the demand for resources from China, according to the Reserve Bank of Australia (pdf).

“That all changed in the second half of 2008, as the effects of the mining boom were offset by the impact of the global financial crisis,” according to the RBA.

However, the mining boom placed Australia in a strong economic and fiscal position ahead of the crisis and helped accelerate the post-crisis recovery, reported the Australian Broadcasting Corporation.

According to the national mining union, the CFMEU, the Australian mining industry “suffered only mildly” from the pandemic in comparison to other major industries.

Additionally, despite trade sanctions from China, mining profits reached a record $55 billion (US$36.4 billion) in the June 2021 quarter.

“This underlined the significance of the fact the mining and resources sector has managed to stay strong during the pandemic—generating value profits, taxes and royalties and protecting the jobs of hundreds of thousands of Australians,” reported Australian Mining.

According to the Australian Bureau of Statistics (ABS), mining industry earnings grew 32.7 percent across all areas to $54.3 billion for the 2021-22 financial year.