The Australian Mining Review


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


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.

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 ?? Image: METS Ignited. ??
Image: METS Ignited.

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