During recent years, the impact of the mining boom has been clearly evident in the revenue
figures of mining companies, in their profit figures and in the significant increase in the market
value of their shares. In addition, the mining boom produced an expansion in mining activity that
is likely to persist. However, it is to be hoped that the boom generated benefits elsewhere in the
Australian economy as well. This paper asks what those benefits were.
The short answer to this question is that any benefits from the mining boom appear to have
dissipated soon after the initial impact. Even some of the early increase in the market value of
mining companies was lost as a result of unwise investments on the part of these companies.
More generally, the paper examines how incomes and other economic data have changed since
2004, which is taken as the base year or benchmark. Commodity prices took off after 2004 and
so it is assumed that the benefits of the boom should be apparent by comparing post-2004 data
with the data for 2004 and earlier.
Most of the increase in revenue from the mining boom went into the profits of mining companies
although some also went into payments on intermediate inputs, including labour costs. Much of
the benefit arising from mining company profits would have been diluted in Australia as a result of the substantial foreign ownership of Australia’s mining industry
but some accrued to government
through higher taxes and royalties.