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8401.0 - Mining, Electricity and Gas Operations, Australia, Preliminary, 1999-2000  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 26/02/2001   
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THE MINING INDUSTRY 1999-2000

This page provides a summary only of the main highlights of the Australian Mining and Utilities industries for 1999-00. More detailed statistics, along with tables and explanations for movements, are given in publication Cat. no. 8401.0 Mining, Electricity and Gas Operations, Australia, 1999-00, which was released on 26 February 2001.


INTRODUCTION

The term 'mining industry' in the following commentary refers to the sum of Coal mining, Oil and gas extraction, Metal ore mining, Other Mining and Services to mining.

During 1999-2000 several mining industries experienced price increases, the standout among these being the oil and gas extraction industry. However, the major commodities of coal and gold remained under pressure, gold recording its lowest price in twenty years. The coal industry has undergone significant industry restructuring, staff cuts and mine closures as producers strive to remain competitive. The gold industry has seen a fall in production, several high cost mines closing and a number of mergers occurring. Australian producers and exporters retained some measure of protection against relatively low prices for many commodities through the continued weak position of the Australian dollar as most contracts are written in US dollars.

Brought about by weaker commodity prices and a subdued Asian economy, which is now recovering, turnover continues to fall over the past few years. Production levels were maintained or increased by concerted efforts on the part of mining companies to cut costs, staff cuts and improve efficiencies.

Employment within the industry fell, most notably in the services to mining industry which is recording a downturn in exploration activity.

Mining - Selected indicators



Turnover

Turnover in the mining industry decreased by $2.7b (6%) to $40.4b in 1999-2000. In the coal mining industry turnover was down $1.2b (10%) to $10.6b. Turnover for the gold ore mining industry decreased by $549m (10%) to $4.9b. Other industries experiencing decreases in turnover were iron ore, down $283m (6%) to $4.2b and services to mining, down $1.5b (41%) to $2.1b during the reference period. Increases in turnover occurred for the oil and gas extraction industry, up $1.1b (12%) to $9.7b and in the silver-lead-zinc ore mining industry, increasing $277m (18%) to $1.8b. Other mining (Anzsic subdivision 14) remained steady, increasing by only $31m (1%) to $2.3b.

Industry value added

Industry value added (IVA) for the mining industry decreased by only $8m (less than 0.1%) to $22.9b in 1999-2000. In the coal mining industry IVA decreased by $108m (2%) to $5.3b. The gold ore mining industry recorded a decrease of $308m (13%) to $2.0b. The iron ore mining industry decreased $359m (12%) to $2.7b and IVA fell $380m (34%) to $740m in the services to mining sector. In the oil and gas extraction industry IVA increased $1.0b (14%) to $8.2b, brought about by a dramatically increased commodity price, offset decreases in other industries. An increase was also reported in the silver-lead-zinc ore mining industry, up $209m (31%) to $893m.

Trading profit

Trading profit for the mining industry increased by $72m (less than 1%) to $21b in 1999-2000. Trading profit in the oil and gas extraction industry increased by $931m (14%) to $7.7b. This was attributable to improved oil prices and increased production. Increases in trading profit were also recorded in the copper ore mining industry, up $117m (15%) to $874m, and silver-lead-zinc ore mining industry, up $208m (32%) to $856m.

Earnings before interest and tax

Earnings before interest and tax (EBIT) increased by $324m (4%) to $8.9b in 1999-2000. EBIT in the coal mining industry increased by $317m (19%) to $2.0b. Oil and gas extraction contributed the greatest proportion of total mining EBIT, reporting $3.7b in 1999-2000.

Operating profit before tax

Operating profit before tax (OPBT) increased by $424m (6%) to $7.2b in 1999-2000. The oil and gas extraction industry reported $3.1b (up 13%) and accounted for 43% of total OPBT.

Employment

Employment within the mining industry decreased by 8,673 persons (12%) to 63,239 persons in 1999-2000. Due to a significant reduction in the level of exploration activity, the services to mining industry reported the largest relative and absolute decrease, falling 5,134 persons (34%) to 9,958 persons. The coal mining industry reduced its employment by 2,678 persons (13%) to 17,232. Employment in the gold ore mining industry decreased by 916 persons (11%) to 7,671 persons.

The oil and gas extraction industry reported a rise in employment, increasing 315 persons (5%) to 6,137. The iron ore mining industry, increased 76 persons (2%) to 5,044 and the other mining industry increased 392 persons (7%) to 6,416 persons.

Wages and salaries

Total wages and salaries for the mining industry decreased by $786m (14%) to $4.8b in 1999-2000.


THE ELECTRICITY SUPPLY INDUSTRY

Structural reforms have resulted in vertical and horizontal disaggregation of the industry and these have had a significant impact on the data presented. The formation of separate businesses responsible for generation, transmission and distribution has resulted in increases in values for data items such as purchases and sales as transactions take place between units that were previously part of vertically integrated operations. Diversification of energy businesses has seen the electricity businesses enter the gas supply market and conversely, the gas businesses enter the electricity market as opportunities arise within these markets. Further detail about the effects or reform appear in the ABS publications Electricity, Gas, Water and Sewerage Industries, Australia, 1997-98 (Cat. no. 8208.0), released in September 1999 and Electricity, Gas, Water and Sewerage Operations, Australia, 1998-99 (Cat. no. 8226.0) released in September 2000.

Turnover increased by $918m (4%) to $25.2b in 1999-2000.

Industry value added decreased by $121m (1%) to $9.6b.

Trading profit decreased by $223 (2%) to $8.7b.

Earnings before interest and tax decreased by $9m (less than 1%) to $5.6b.

Employment remained steady, decreasing by just 107 persons (less than 1%) to 32,594 persons.

Wages and salaries increased by $68m (3%) to $2.1b.

Electricity - Selected indicators



THE GAS SUPPLY INDUSTRY

In recent years, the statistics for the gas industry have been affected by industry reform and business restructuring. This process has continued through the 1999-2000 reference period. The 1997-98 publication Electricity, Gas, Water and Sewerage Industries, Australia (Cat. no. 8208.0), released in September 1999, contains an article which describes these changes.

Turnover increased by $158m (3%) to $5.3b in 1999-2000.

Industry value added increased by $221m (16%) to $1.6b.

Trading profit increased by $222m (16%) to $1.6b.

OPBT increased by $211m (26%) to $1.0b.

Wages and salaries decreased by $29m (16%) to $153m.

Employment decreased by 182 persons (6%) to 2,891 persons.

Gas - Selected indicators



THE WATER SUPPLY AND SEWERAGE AND DRAINAGE SERVICES INDUSTRIES

Only 1999-2000 data is presented here and includes operations by private and public trading enterprises. It also includes the operations of government where the water supply and sewerage and drainage activities are represented as separate management units. For 1998-99 data was collected via the Economic Activity Survey which excluded this latter category of units.

Turnover was $6.2b.

Industry value added was $3.9b.

Trading profit was $3.4b.

OPBT was $1.9b.

Wages and salaries was $754m.

Employment was 15,557 persons.


EXPLANATORY NOTES


INTRODUCTION

1 This publication presents preliminary statistics on management units compiled from the 1999-2000 Mining Collection, the 1999-2000 Electricity and Gas Collection and the 1999-2000 Water and Sewerage Industries Survey.

2 The Mining and Electricity and Gas Industries Collections and Water and Sewerage Industries Survey are conducted as components of the ABS integrated economic statistics framework. Data from each industry sector conform to the same basic conceptual standards, allowing comparative analysis between and across different industry sectors. The collections aim to meet the demand of users who require annual financial statistics which can be related to other industry sectors in Australia on a consistent basis.


REFERENCE PERIOD

3 The period covered by these collections is in general the 12 months ended 30 June 2000. Where businesses are unable to supply information on this basis, the substitute accounting period is used for data other than that relating to employment.


SCOPE

4 Financial data presented incorporates all units in scope of the Mining and Electricity and Gas Industries Collections and Water and Sewerage Industries Survey that were in production stage at any time during the year. It also includes any temporarily inactive units ('temporary nils'), i.e. those units which were in development stage or which were not in production, but which still existed and held assets and liabilities and/or incurred some non-operating expenses (e.g.depreciation, administration costs). Prior to 1997-98 these temporarily inactive units were excluded from the collections. Their inclusion, however, has minimal effect on the estimates of the financial and employment data.

5 Employment data in this publication represents employment for all units operating as at 30 June.

6 The 1993 edition of the Australian and New Zealand Standard Industrial Classification (ANZSIC) (Cat. no. 1292.0) has been used to classify management units and establishments included in the collections.

7 Mining broadly relates to the extraction of minerals occurring naturally as solids such as coal and ores, liquids such as crude petroleum, or gases such as natural gas, by such processes as underground mining, open-cut extraction methods, quarrying, operation of wells or evaporation pans, dredging or recovering from ore dumps or tailings. Activities such as dressing or beneficiating ores or other minerals by crushing, milling, screening, washing, flotation or other processes (including chemical beneficiation) or briquetting are included. This is because they are generally carried out at or near mine sites as an integral part of mining operations. Natural gas absorption and purifying plants are also included.

8 The annual Mining Collection now covers all of the ANZSIC classes in Division B hence this preliminary publication provides data for coal mining, oil and gas extraction, metal ore mining, other mining as well as services to mining.

9 It should be noted that companies engaged in providing contract mining services are not always collected within the scope of the annual collection. Under the principles set down within ANZSIC, contract mining organisations will only be included in ANZSIC Subdivisions 11 to 14 if they are responsible for all facets of the mining operation at a particular site.

10 Companies engaged in providing contract mining services (such as drilling or exploration) for part of the operations at the mine site are classified to 'Services to mining' (ANZSIC Subdivision 15). In addition, other companies that are contracted to perform only some tasks at a mine site may be outside the scope of the annual Mining Collection, e.g. mine site preparation and/or construction, and removal of overburden, would be classified to the Construction Industry, and would therefore also be outside the scope of the Mining Collection.

11 The Electricity and Gas Industries Collection covers those management units mainly engaged in the generation, transmission or distribution of electricity (ANZSIC Class 3610); the manufacture of town gas from coal and/or petroleum; or the mains distribution of town gas, natural gas or liquefied petroleum gas (ANZSIC Class 3620). Note that management units mainly engaged in wholesaling petroleum or petroleum products or in retailing liquefied petroleum gas (in bulk or containers) are classified to ANZSIC Class 4521, Petroleum Product Wholesaling. The operation of pipelines for the transport of oil and gas is classified to ANZSIC Class 6501, Pipeline Transport. Neither of these classes are included in the Electricity and Gas Industries Collection.

12 The Water and Sewerage Industries Survey covers those management units engaged in the storage, purification or supply of water or the operation of sewerage or drainage systems, including sewerage treatment plants (ANZSIC Class 3701: Water Supply, and Class 3702: Sewerage and Drainage Services).


STATISTICAL UNITS

13 The basic units for which statistics are reported in ABS integrated industry collections are the management unit and the establishment. This publication presents data for management units only. The final publication includes data at both the management unit and establishment levels.

14 The management unit is the highest-level unit within a business, having regard to industry homogeneity requirements, for which accounts are maintained; in nearly all cases it coincides with the legal entity owning the business (i.e. company, partnership, trust, sole operator, etc.). In the case of large diversified businesses, however, there may be more than one management unit, each coinciding with a 'division' or 'line of business'. A division or line of business is recognised where separate and comprehensive accounts are compiled for it.

15 Each management unit is classified to a single industry irrespective of any diversity of activities undertaken. The industry allocated is the one which provides the main source of income for the management unit. This means, for example, that a management unit which derives most of its income from mining activities would have all operations included in the aggregates and ratios for the mining industry group, even if significant secondary activities (e.g. manufacturing, construction) were undertaken. Likewise, a management unit which derives most of its income from electricity generation activities would have all operations included in the aggregates and ratios for the electricity industry, even if significant secondary activities (e.g. water supply, coal mining, retailing) were undertaken. For example, the electricity data collected for the Australian Capital Territory and the Northern Territory includes their major water supply companies, since at the management unit level they are classified as part of the electricity industry.


RELIABILITY OF ESTIMATES

16 Data presented in this publication for Other mining (ANZSIC Subdivision 14), Services to mining (ANZSIC Subdivision 15), and Water supply, sewerage and drainage services (ANZSIC Subdivision 37) are partly based on information collected from a sample of businesses and are, therefore, subject to sampling variability: that is, they may differ from the figures that would have been produced if the data had been obtained from all businesses in the population. One measure of the likely difference is given by the standard error (SE), which indicates the extent to which an estimate might have varied by chance because the data were obtained from only a sample of units. There are about 2 chances in 3 that a sample estimate will differ by less than one SE from the figure that would have been obtained if the data had been produced from all units, and about 19 chances in 20 that the difference will be less than two SEs.

17 The SE can also be expressed as a percentage of the estimate, and is known as the relative standard error (RSE). Estimates highlighted with an asterisk (*) indicate they are subject to sampling variability between 25% and 50%. Those estimates highlighted with ** are subject to sampling variability greater than 50%. Detailed estimates of RSEs can be made available upon request.

18 The size of the RSE may be a misleading indicator of the reliability of some of the estimates for trading profit, operating profit before tax (OPBT), earnings before interest and tax (EBIT) and industry value added (IVA). This situation may occur where an estimate may legitimately include positive and negative values reflecting the financial positions of different businesses. In these cases the aggregate estimate can be small relative to the contribution of individual businesses resulting in an SE which is large relative to the estimate.

19 The imprecision due to sampling variability, which is measured by the SE, should not be confused with inaccuracies that may occur because of inadequacies in available sources from which the population frame was compiled, imperfections in reporting from providers, errors made in collection such as recording and coding data, and errors made in processing data. Inaccuracies of this kind are referred to collectively as non-sampling error and they may occur in any enumeration, whether it be a census or a sample. Every effort is made to reduce non-sampling error to a minimum by careful design of questionnaires, editing processes, and efficient operating procedures.


ACKNOWLEDGMENT

20 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated: without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.


RELATED PUBLICATIONS

21 For details of other related ABS publications to be issued, refer to the Catalogue of Publications and Products (Cat. no. 1101.0). The ABS also issues on Tuesdays and Fridays a Release Advice (Cat. no. 1105.0) which lists publications to be released in the next few days. The Catalogue and the Release Advice are available from any ABS office.

22 Mining and related statistics are contained in a number of other publications produced by the ABS, the Australian Bureau of Agricultural and Resource Economics (ABARE) and the Australian Geological Survey Organisation (AGSO). Users are also referred to the annual reports of the State Mines Departments, which contain mineral statistics. Data covering the public supply of electricity is available from the Electricity Supply Association of Australia, while the Australian Gas Association provides data covering the distribution of reticulated natural gas.

23 A list of ABS, ABARE and AGSO publications may be found in the ABS publication Australian Mining Industry, 1998-99 (Cat. no. 8414.0).


UNPUBLISHED STATISTICS

24 The statistics presented in this publication are only part of the information which is available from the Mining Industry and Electricity and Gas Industries Collections and Water and Sewerage Industries Survey. Unpublished information is generally made available on request, subject to it satisfying quality and confidentiality guidelines associated with the release of such data. The charges for these services vary according to the time required to extract, tabulate and evaluate the data.

25 Inquiries should be made to the officer named on the front cover of this publication.

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