Mining Boom

oomSummary of the article

The article “ Mining from bust to boom” researched and written by Ellis Connolly and David Orsmond is the comprehensive analysis of the impact of current mining boom post 2000s on the Australian economy until recent the decade, while comparing the statistics with the past mining boom. This topic of interest has been in discussion for many years due to its crucial impact on the rapid growth of Australian’s economy compared to rest of the world. Much of this discussion is related to the measures taken by government to regulate its impact on the rest of the economic sector in terms of interest rate, exchange rate, taxes and subsidies. Therefore, Connolly and Orsmond based on the ABS statistics have efficaciously outlined in what ways Australia has been well positioned to benefit from these changes in its macro and microenvironment and changes around the world (changes in commodity prices, increased demand, lower cost of shipping). On contrary, as much as Connolly and Orsmond have optimistically shown the light on the effects of the boom there has been diminutive discussion on its negative spill over effect on the economy until to the recent decade.

Therefore this article aims to highlights few areas of connotation that should be considered when looking at overall impact of Mining boom on Australian economy.

As researched and stated by Connolly and Orsmond, Australian mining industry prior to 2000s was the representative of Australia’s ‘old economy’ and contributed minimal to the GDP growth. In1980s to 1990s the progression in mining sector dramatically dropped due to doldrums of global commodity prices and Asian Financial Crises, which consequently impacted the world demand adversely. This encouraged the upsurge of consolidation in Australian mining industry (Economies of scale) aspiring to compensate their fading profitability.

The mining industry took a major positive turnaround in 2000s until recent decade, due to dramatic...