‘Lucky’. That’s how Australia’s second-longest serving Prime Minister John Howard described Australia’s abundance of national resources in his recent interview with The Daily Telegraph to mark 25 years since he won government in 1996. And he’s right.
Here in NSW we are truly lucky to have a world class mining sector and some of the best mineral deposits in the world. With strict safety protocols in place our mining operations have been able to keep going during the pandemic, and there’s strong evidence this helped provide significant economic support last year.
Every year we survey the direct economic contribution of our mining member companies. We ask them how much they spend in NSW, where they spend it, how many jobs they support, and how many businesses they make purchases from.
The results from our latest survey show our mining industry made a huge contribution to keeping the NSW economy strong, despite the pandemic.
The survey found our mining member companies directly injected $15 billion into the state economy in 2019-20, while supporting tens of thousands of jobs and generating billions in additional spending across NSW, particularly in regional communities.
This $15 billion in direct mining spending in NSW is an increase of $1.3 billion on the previous financial year, and the highest in the nine years that the survey has been undertaken.
Around 29,000 mining jobs were supported by our member mining companies in 2019-20. Remarkably, this was an increase of around 3,000 jobs compared to the previous financial year, and once again the highest in the history of the survey.
The survey also found almost 8,000 local businesses were part of the mining supply chain, sharing in the $15 billion in mining spending across NSW. Importantly, more than 2,500 of these businesses were in the Sydney region, highlighting how mining in regional NSW delivers tangible economic benefits to people living in the suburbs of Sydney.
These results are good news for our economy and for people in regional communities across NSW. They also highlight future opportunities for economic growth from a strong mining sector.
In November 2020, NSW Treasury forecast a fall in mining royalties to $1.4 billion driven by what they described as a ‘weakening’ in demand for thermal coal. However, the opposite has occurred with the coal price doubling since June 2020, supported by strong demand, all worth potentially hundreds of millions in additional royalty revenue for NSW.
Demand for our coal remains strong, including from our top three traditional markets Japan, Korea and Taiwan, as well as important emerging markets like India, Vietnam and the Philippines.
Demand for a range of other minerals also continues to gain momentum, with recent high prices for gold, silver, copper, and nickel. All these are needed for a range of electronics and technology, including for electric vehicles, batteries, solar panels and other essential components of renewable energy generation. All are available in abundance in NSW, and we are seeing record levels of exploration and high levels of capital investment on new projects on the back of this potential.
With the vaccine roll-out underway there is much optimism that the worst is behind us. We all hope that a bright future beckons, and that the quality of life we all seek will be obtained. With the right policies in place, industries like mining can help drive economic recovery and the means for a better quality of life for the people of NSW for decades.