METS UNDER THE MI­CRO­SCOPE

Aus­tralia’s re­sources in­dus­try is world-renowned for its size, scope and com­pet­i­tive­ness. METS Ig­nited – an in­dus­try-led Growth Cen­tre sup­ported by the Australian Gov­ern­ment – re­cently com­pleted re­search into the sig­nif­i­cant con­tri­bu­tion made by the minin

The Australian Mining Review - - CONTENTS - CAMERON DRUM­MOND

AUS­TRALIA has seen an un­prece­dented in­crease in min­ing ca­pac­ity over the last decade.

On the back of the con­struc­tion boom, pro­duc­tion has dou­bled for ther­mal and me­tal­lur­gi­cal coal, baux­ite, and alu­mina, and tripled for iron ore.

The na­tion has also as­sumed the man­tle of lead­ing lithium pro­ducer, and has seen a 30 per cent in­crease in alu­minium pro­duc­tion.

In the back­ground, Aus­tralia’s METS in­dus­try has not only kept pace – it has thrived.

The sec­tor is driving new ap­proaches to help de­liver enor­mous pro­duc­tiv­ity im­prove­ments across all com­modi­ties. In the process it is es­tab­lish­ing a global rep­u­ta­tion for in­no­va­tion.

In a land­mark re­port, The Australian METS Sec­tor – its Eco­nomic Con­tri­bu­tion and De­mo­graph­ics, METS Ig­nited has taken the first steps to quan­tify – year-on-year – the size, scope, and de­mo­graph­ics of this highly in­no­va­tive sec­tor of the econ­omy.

The find­ings of­fer a deep in­sight into one of Aus­tralia’s most ad­vanced and com­plex in­dus­tries.

METS at a glance

The re­port de­fined the Australian METS sec­tor as con­sist­ing of the sup­ply of goods and ser­vices to the min­ing ex­trac­tion in­dus­try:

• from both direct and in­di­rect sup­pli­ers

• both spe­cialised and non-spe­cialised goods and ser­vices

• to both Australian min­ing ex­trac­tion and ex­ports to for­eign min­ing ex­trac­tion in­dus­tries.

The def­i­ni­tion ex­cluded sup­ply to the oil and gas in­dus­try and sup­ply to min­er­als pro­cess­ing, ex­cept where ba­sic pro­cess­ing oc­curs at the mine site.

The over­all Australian METS sec­tor gen­er­ated $86.2 bil­lion gross value add (GVA) – or five per cent – to the Australian econ­omy in 2014-15.

While the sec­tor peaked at $128 bil­lion GVA at the top of the con­struc­tion boom, it has con­tin­ued to grow, al­most dou­bling in size from the es­ti­mated $44 bil­lion GVA in 2005-06.

To­day, the METS sec­tor sup­ports over half a mil­lion lo­cal jobs, and the in­dus­try con­tin­ues to build with a sus­tained av­er­age growth of close to seven per cent (Trad­ing Eco­nomics, 2017), far out­strip­ping the av­er­age growth of the Australian econ­omy.

The Australian METS Sec­tor re­port pro­vides a clear, in­dus­try-led dis­tinc­tion about the na­ture and types of com­pa­nies that are con­sid­ered within the METS in­dus­try.

The re­port rep­re­sents a sig­nif­i­cant leap in for­mal­is­ing the sec­tor to tai­lor poli­cies and ac­tions to­wards a de­fined and quan­tifi­able group of com­pa­nies.

METS in­dus­try seg­ments in­sights

The ‘spe­cialised METS sec­tor’ rep­re­sents $43.3 bil­lion of the $86 bil­lion and the bal­ance $42.9 bil­lion is rep­re­sented by the non-spe­cialised ser­vices re­quired by the in­dus­try.

The fig­ures are an im­por­tant reminder that while the min­ing op­er­a­tions are a pow­er­ful driver of eco­nomic wealth, the flow-on ef­fects are far more than tax rev­enue and com­mod­ity ex­ports. Min­ing has the power to spark an en­tire in­dus­try, giv­ing op­por­tu­nity to METS com­pa­nies to con­tinue to de­velop in­no­va­tive so­lu­tions that not only sup­port lo­cal in­dus­try but in fact be­come sig­nif­i­cant growth ex­port op­por­tu­ni­ties.

The Australian METS Sec­tor re­port iden­ti­fies that there are nine in­dus­try seg­ments, which en­com­pass at least 40 subindus­tries that pro­vide spe­cialised goods and ser­vices to the min­ing in­dus­try – each one vi­tal to ma­jor projects. The list of subindus­tries is di­verse, cov­er­ing ev­ery­thing from wa­ter sup­ply to con­struc­tion ser­vices, equip­ment hire and train­ing, and soft­ware de­vel­op­ment. While con­struc­tion rep­re­sented the largest con­trib­u­tor on a $GVA ba­sis at $8.1 bil­lion in 2014-15, it also re­flects the largest volatil­ity in the sec­tor.

The con­struc­tion seg­ment GVA peaked at $17.1 bil­lion in 2011-12.

There has been enor­mous growth in the pro­fes­sional and tech­ni­cal ser­vices seg­ment. This sec­tor is 2.6 times larger than in 2005-06, with jobs growth from 25,000 to 68,000.

All of the growth de­vel­op­ment seg­ments are lever­ag­ing in­no­va­tion, lead­ing-edge tech­nolo­gies and are global ex­porters.

This group also has enor­mous ex­port po­ten­tial and growth op­por­tu­ni­ties. While they ben­e­fited from the fea­si­bil­ity, de­sign and con­struc­tion boom, th­ese sec­tors de­liv­ered a net 94,000 new jobs be­tween 2005-06 and 2011-12.

Con­struc­tion-re­lated jobs, on the other ex­treme, have more than halved since the peak of 2011-12, reach­ing 93,000. Con­struc­tion over the same 2005-06 to 2011-12 has nev­er­the­less de­liv­ered 15,000 extra jobs grow­ing from 28,000 to 44,000.

Of im­por­tance to the Australian econ­omy are ex­ports emerg­ing from the ba­sic equip­ment man­u­fac­tur­ing seg­ment.

Large amounts of non-fer­rous metal man­u­fac­tur­ing are as­sist­ing the seg­ment to ac­count for ap­prox­i­mately 19 per cent of all METS in­dus­try ex­ports.

Ba­sic equip­ment man­u­fac­tur­ing is closely fol­lowed by the trans­port in­dus­try seg­ment. Rail and road trans­port prod­ucts and ser­vices as­sist the seg­ment in con­tribut­ing 14 per cent of the METS in­dus­try’s ex­ports.

The find­ings in the re­port are crit­i­cal to un­der­stand­ing and con­tin­u­ing sup­port in the METS sec­tor. Through the pro­vi­sion of bet­ter qual­ity and reg­u­lar in­for­ma­tion, METS Ig­nited is able to es­tab­lish an ac­cu­rate por­trayal of the in­dus­try, help­ing quan­tify the im­pact of growth mea­sures and pro­vid­ing ev­i­dence where nec­es­sary when growth is not as strong as pre­dicted.

In ad­di­tion, through iden­ti­fy­ing in­dus­try seg­ments and sub­sec­tors, it is pos­si­ble to de­velop ap­proaches to align var­i­ous and rad­i­cally dif­fer­ent stake­hold­ers to garner dif­fer­ent perspectives on in­no­va­tion and col­lab­o­ra­tion.

Image: METS Ig­nited.

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