Australia’s economy has traditionally been based on exports of agricultural products. Since World War II, the country has also become one of the world’s leading exporters of minerals. Australia’s isolated location has to some extent inhibited industrialization, but the authorities have encouraged industrial travel with the aim of reducing the country’s dependence on imports. Since the 1960s Australia has achieved a balanced and relatively advanced industrial structure, but the industry is strongly protected from outside competition.
About 20 percent of Australia is forested. Most timber is cut in the southwestern and southeastern parts of the country. Jarrah and curry forests provide the most valuable timber, and large pine plantations have also been constructed. Some hardwood is exported, but the country has to import large quantities of timber, wood pulp, cellulose and paper.
Fishing is of little economic importance, but catches show a steady increase. Of greatest value is the catch of shrimp, lobster, sea snails, tuna and clams. There is also some aquaculture, with emphasis on oysters, shrimp and crayfish.
The most dominant feature of Australia’s business world after World War II is the development of mining. Australia is now self-sufficient with most important minerals, and mineral exports make up about 25 percent of the country’s total export value. Australia has the world’s largest economically viable deposits of lead, nickel, tantalum, uranium and zinc, and among the world’s largest of bauxite, coal, cobalt, copper, diamonds, gold, iron ore, manganese ore, ilmenite, rutile and zircon.. Mineral extraction has led to the opening of areas of the country that would otherwise have been closed. Many ports, roads, railways and urban communities are only built due to mineral extraction. Another ripple effect of this is a new, high-tech industry for the development of equipment and computer programs for use in the recovery.
Coal was discovered as early as 1797 at Newcastle in New South Wales, and mining started in 1804. The coal is of high quality and is located as a large pool throughout the coastal area from Newcastle in the north to Wollongong in the south. This coal basin forms the basis for the Australian heavy industry. Coal is also found in Queensland. Australia is the world’s largest exporter of coal with an annual production of 254 million tonnes (2000). The Latro Valley in Victoria has one of the world’s largest deposits of lignite. The field is operated as a quarry and provides cheap energy for the industry and the thermal power plants.
In 1961, almost inexhaustible deposits of high-grade iron ore were discovered in the Pilbara area of Western Australia. The mines are operated as open-pit mines, and the ore is transported by rail to the coast with shipping from Dampier, Cape Lambert and Port Hedland. There are also facilities for pelletizing the ore. Annual production is 167 million tonnes (2000), and together with Brazil the country is the world’s largest exporter.
In the early 1960s, large deposits of bauxite were discovered, and Australia has become the world’s largest producer. The largest deposits are Gove in Arnhem Land (Northern Territory), Weipa on the northwest coast of the Cape York Peninsula (Queensland) and Darling Ranges (Western Australia). There are smelting of aluminum in Bell Bay (near Georgetown) in Tasmania, Point Henry in Victoria and Kurri Kurri, New South Wales. Construction of alumina is located in Gladstone in Queensland and in Kwinana (near Perth) in Western Australia.
Australia has been a leading producer of lead and zinc since the deposits in Broken Hill were discovered in 1883. The ore is processed in Port Pirie in South Australia. Copper is mined in Mount Isa, Queensland, where copper and lead smelting plants are located. Australia is now one of the world’s largest exporters of manganese, which is important for the iron and steel industry. The ore comes from Groote Eylandt in the Gulf of Carpentaria. In the 1960s, large deposits of nickel ore were found around Kalgoorlie in Western Australia. Another major nickel producer is Queensland.
The production of gold rose rapidly in the 1980s and is extracted, for example, in the Yilgarn region (Western Australia), at Cobar (New South Wales) and in Tasmania. Australia is also by volume the world’s largest producer of diamonds, with 60 percent of the world’s proven resources, as well as large deposits of sapphires and opals. Diamonds are extracted at Argyle (Western Australia). One of the world’s richest deposits of opals is found in South Australia. Other minerals include uranium (Alligator Rivers area, Northern Territory), tin, copper, tungsten, antimony, magnesite, titanium ore, asbestos, zircon and plaster. Much effort is being spent on exploration for new recoverable deposits. Places where recovery started after 1990 include the Olympic Dam in South Australia (copper, uranium, gold), Century (zinc), Cannington (lead, zinc, silver) and Ernest Henry (copper, gold) in Carpentaria-Mount Isa- the region, Cadia and Ridgeway (gold, copper) in New South Wales and Bronzewing (gold), Wallaby (gold) and Silver Swan (nickel) in the so-called Eastern Goldfields of Western Australia. One area particularly rich in a wide variety of minerals is the Murray Basin, which extends into New South Wales, Victoria and South Australia.
Several important oil and natural gas discoveries have been made, and there is potential for several discoveries. Currently, most of the oil and gas production is offshore at the Carnarvon basin off Onslow and Dampier in Western Australia. Other deposits of oil and gas have been identified further north, including a joint project with East Timor. Traditionally, the most important recovery area has been the Gippsland basin in the eastern part of the Basin that separates Tasmania from the mainland, but production is declining. New discoveries have been made further west. The proven oil reserves are (2003) at 3.5 billion barrels, and production in the same year was 31.5 million tonnes (730,000 barrels per day). The annual production of natural gas is 34.5 billion m 3 (2003).
The energy supply is mainly based on coal and petroleum. The coal deposits are easily recoverable and therefore relatively inexpensive. This energy has in the last 20 years produced a rapid growth of energy-intensive industry. In 2017, the country’s total electrical energy production was 247 TWh, of which 85 percent was based on fossil energy sources. The country’s coal power plants accounted for 60 percent of production, while 22 percent came from gas power plants.
Hydroelectric power, which is particularly important in Tasmania, accounted for 5.6 percent of power generation in 2017. The majority of hydroelectric power comes from the development of the Snowy Mountains and Kiewa in northeastern Victoria.
In some areas, the use of renewable energy sources, such as solar energy and wind power, is becoming more widespread. In 2017, these energy sources accounted for 2.8 and 5.4 per cent of the country’s power generation, respectively.
The industry experienced a major upturn during the Second World War, and expansion has continued for some time. In the five-year period 1987–92, the volume of exports of industrial products increased by 13 percent per year, reaching 1992 percent of the country’s total exports in 1992. In 2000, the industry accounted for 13 percent of GDP and 13 percent of employment. The large coal deposits in New South Wales form the basis of an extensive iron and steel industry. The most important centers for iron and steel production are Newcastle and Wollongong – Port Kembla, with secondary centers in Whyalla in South Australia and Kwinana at Perth in Western Australia. Steel production has doubled since the 1960s. There are several aluminum smelters, including George Town, Port Henry in Victoria, Kwinana and Gladstone in Queensland. Near Hobart in Tasmania there are also zinc and ferromangan smelting plants. The metal industry has created the basis for a relatively large automotive industry (annual production of 3.2 million cars in 1997), with factories in Adelaide, Melbourne, Sydney and Perth.
Another very important industry is the food industry, which is based on the processing of the country’s agricultural products. Otherwise, there are chemical, textile and wood processing industries. The graphics industry has in recent years been growing strongly. The major industrial areas are around Sydney, Melbourne, Brisbane, Adelaide and Perth. Sydney dominates the machine industry, while Melbourne is a leader in apparel, footwear, textiles, knitwear, knitwear and leather making.
Industry and mining
Production of some important goods 2001
|Minerals and metals|
|coal||301 000 000 t|
|iron ore||170 999 000 t|
|nickel||168 300 000 t|
|bauxite||53 802 000 t|
|manganese||1 613 000 t|
|uranium||7 578 000 t|
|gold||296 410 kg|
|tin||9 146 000 t|
|A selection of industrial products|
|cotton Tools The||56 000 000 m²|
|Woven woolen fabrics||6 300 000 m²|
|Aluminum (unprocessed)||6 489 000 t|
|pig iron||6 489 000 t|
|Meat and meat products||3 889 600 t|
|Tobacco and tobacco products||20 688 000 t|
|beer||1 768 000 l|
|cement||7 937 000 t|
According to Countryaah, Australia has a small surplus in foreign trade. Minerals (coal, coke, iron, lead, zinc, copper, bauxite and petroleum products) account for about 25 percent of the export value. Next comes wool (Australia supplies about half of all wool on the world market), meat and wheat. Imports include machinery, transport equipment, chemicals, oil and petroleum products and foodstuffs.
The United Kingdom was previously by far the most important trading partner, but its share of Australia’s foreign trade has declined significantly since the 1950s. Australia is increasingly orienting its foreign trade towards the US and Asian markets. Although the share of processed products in exports has risen, Australia is still a mainly commodity exporting country. While agricultural and other commodity-based products account for the majority of exports, processed goods (such as capital goods, transport products and consumer goods) characterize imports.
60 percent of exports go to East and Southeast Asia, of which Japan alone accounts for about 20 percent. Other important export markets are the United States, Singapore, New Zealand and the EU countries. East and Southeast Asia accounted for 40 percent and the United States for about 20 percent of imports in 2001.
Transport and Communications
The road network has a total length of just over 800,000 km, of which about 40 percent has a fixed tire (2003). Long distances mean that Australia has one of the world’s highest per capita spending on road network maintenance.
The rail network has an area of 40,000 km (including 4150 km of narrow-gauge lanes associated with sugarcane cultivation in Queensland), which is small in proportion to the size of the country, but much in proportion to the population. The capacity has been relatively low, because the track width is different in the different states. In 1946, it was decided that the entire rail network should be converted to a 1.43 m gauge. Among other things, federal lines with standard gauge between Sydney and Melbourne were opened in 1962, and the only transcontinental rail line, from Brisbane to Perth, was remodeled in 1969. Most of the rail network is now privatized. In 2003, a rail link between Alice Springs and Darwin was completed.
A dense network of flight routes spans the entire continent. There were 261 airports in Australia in 2002. Twelve of these serve international traffic. The main international airports are Sydney, Melbourne, Brisbane, Adelaide and Perth.
The main port cities are Sydney, Melbourne, Newcastle, Brisbane, Port Kembla and Port Adelaide. In 2002, the merchant fleet consisted of 622 vessels with a total capacity of 1.9 million gross tonnes. Large parts of Australia’s foreign trade are transported on foreign ships.
Foreign trade as a percentage by country 2001
Exports by main product groups 2001 (percentage)
|Raw materials and semi-finished products (except fuel)||19.7|
|including metal ores and scrap iron||62.6|
|of which solid fuel (coal, etc.)||43.0|
|liquid fuel (oil, etc.)||43.1|
|Foods and live animals||16.8|
|cereals and cereal products||26.9|
|Machines and transport equipment||11.2|
Imports by main commodity groups 2001 (percentage)
|Machines and transport equipment||45.2|
|including office machines and computer equipment||15.5|
|Road machines and parts||26.8|
|Chemicals and chemical products||12.0|
|Foods and live animals||4|
Agriculture in Australia
In 1999, the primary industries agriculture, forestry and fisheries contributed 3% of GDP and in 2001 employed 5% of the working population. Until 1950, agriculture contributed over 80% of export revenues, but its relative importance has diminished as industrialization of the country. The farming practices are very modern, with large operating units. The Australian continent is basically poorly adapted for agriculture. Very few areas have good soil. Most of the soil is nutrient poor which requires high use of artificial fertilizers for cultivation. Australia is also the driest continent (after Antarctica). Warm summers with strong sunlight cause rain to quickly evaporate (evaporate). In addition, the rainfall varies considerably from year to year, which makes use of groundwater and irrigation facilities important. In the north where summers are relatively humid, sugar and tropical fruits in coastal areas. In the south where the summers are much drier, wheat and other grain cultivation, sheep farming and cattle farming are favored for milk production (in higher wetter areas) and some meat production. Despite the harsh conditions, agriculture is considered to have 60% of land. Most of this, however, is pasture, which is not always in use, or it may be broken. Under 10% of the land area is used for growing crops.
The arable farm is best developed in the southeast. Wheat is the most important growth except in Tasmania, and a significant portion of the wheat is exported. The main area for wheat cultivation is where the rainfall is 350–750 mm per year in the area called the ‘wheat belt’. On the west side of the Great Dividing Range, the ‘wheat belt’ extends from central Queensland and down through New South Wales, Victoria and South Australia. In Western Australia, the ‘wheat belt’ continues around the southwestern part of the state and some distance north along the west coast. Wheat cultivation has increasingly been integrated with sheep farming and cultivation of other crops. Barley, oats, corn and some rice are grown from other cereals. Main fruits are bananas, oranges and apples. In the humid climate in the north, tropical fruits and sugar cane are grown. In addition, cotton, tobacco, vegetables and large quantities of other fruits are grown. Australia also has a fairly large production of wine. Oil growth has become increasingly important since 1990. Animal husbandry is of greater economic importance than arable farming. It is kept most sheep (119 million 2000) and cattle (28 million), but there is also a substantial and intensive poultry and pig team. Australia is the world’s leading producer of wool. The sheep population (which peaked at 180 million in 1970) is highest in New South Wales, Western Australia and Victoria. The cattle herding takes place in more rainy areas in the eastern and southeastern parts of the country and in the Northern Territory. The majority of the cattle herd is raised for slaughter, but in densely populated areas in the southeast the main emphasis is on milk production. 60% of milk and dairy products come from Victoria, where Gippsland in particular is a well-known milk production area.
Production of important growth 2001
|Wheat||23 760 000|
|Cotton (seeds)||968 000|
|Cotton (purified raw cotton)||684 000|
|Building||7 459 000|
|sugarcane||31 228 000|
|grapes||1 551 000|
|potatoes||1 250 000|
|Rice||1 760 000|
Tourism in Australia
Tourism is one of Australia’s largest and fastest growing industries. It has the greatest impact on the country’s employment and foreign exchange income. National tourists (the country’s own citizens holidaying in their own country) account for 3/4 of the tourists’ total consumption, while international tourists account for the remaining 1/4. A different and sensational nature combined with attractive climate and distinctive lifestyle make the country interesting for international tourists. Olympic Games in Sydney in 2000 boosted interest in the country. Among the most famous destinations for international tourists are the Sydney metropolis, the Northern Territory with Uluru (Ayers Rock) and the state of Queensland with its tropical islands and Great Barrier Reef. For the year 2001–02, Australia had 4.8 million foreign visitors, of which 54% stated that they were on holiday, 35% visited friends and/or family or business and 6% were studying. Australia has invested in expanding its sources of income, and the sale of study places has become very important. In total, foreign visitors contributed 11% of foreign exchange revenues.