Today I’d like to explore a topic that is of increasing importance to the economy here in Australia. I’m talking about mining. I’ll start out by getting into how mining developed this way, and look at how it’s progressed into the multi-billion dollar industry it is now. I’ll also talk about some of the pitfalls of this industry, as, without a doubt, it has a sizeable environmental impact.
You all know that Australia was first colonized by the British in 1788 – and, as you can imagine, life was rough at first. There was no industry on the continent – it was too early for that -- and very little in the way of agricultural production. Then, in the 1840s, everything changed. Silver was the first precious metal discovered, and a few years later, lead deposits were found. In 1851, that’s when the real boom kicked off, because gold was found in New South Wales and Victoria. A gold rush immediately followed, the Australian population tripled within a decade, and the country’s economic fortunes would be tied to mining from there on out.
The next mining boom – the one we’re currently riding now – is a direct result of exploration in the Pilbara…that’s the vast, empty region found in the west of the country. Lang Hancock was the first entrepreneur to get his hands on the resources in the area during the early 1950s, and still, more than sixty years later, the company he founded, Hancock Prospecting, is one of the major players in the region.
The main resource the mining companies are digging up in the Pilbara is iron ore. Now, let’s think about why iron ore is important…it’s so important, in fact, that it’s the second most important global commodity behind oil. See, iron ore is used to make what’s called pig iron, and pig iron is the main ingredient used in the production of steel. And, as you know, steel goes into making buildings, cars, roads, railways, ships…you name it. Iron ore is clearly at the heart of the world economy.
At first, the vast majority of Australia’s iron exports went to the West. European countries, the United States, Canada…but in the 1990s, that all began to change. China began opening up its economy and becoming more capitalistic, and its rapid industrial and manufacturing growth has created a huge demand for raw materials like iron. These days China is the biggest importer of Australian iron.
The relationship between China and Australia makes perfect sense due to geography. Other countries that have large mining concerns, like the US, Brazil, and Canada, are much farther away, so unnecessary costs go into shipping iron across the sea. As a result, Australia was able to compete very effectively on price and quickly became the preferred trading partner for the Chinese.
There’s no denying that iron ore mining has had an increasingly positive impact on the Australian economy. It’s responsible for 3 per cent of total jobs in the country, and somewhere between 10 and 20 per cent of them out west, but this comes at a price. Most obvious among them, mining is a very destructive process. Explosives and heavy machinery are used to access the raw materials like iron ore buried deep within the earth. Even after a mine is exhausted and no longer being used, entire ecosystems remain disrupted because the land is torn up and chemicals have infiltrated the soil. This pollutes the groundwater, which means the effects become spread far and wide. This affects not only plant and animal species, but also humans. Agriculture, for instance, is nearly impossible on former mining sites because of soil depletion and erosion.
Additionally, mines are giant, open holes in the ground…and that disrupts the structure of the earth’s crust. When that happens, sinkholes can develop. There have been countless reports of homes and other buildings being sucked into the ground because the abandoned mines below them can’t support the weight of the soil and structure above it.
Now, before I talk about some of the other major industries integral to the Australian economy, let’s look closer at the major mining companies that are found here.