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ABOUT THIS PUBLICATION

This publication presents the first release of mining industry estimates from the Economic Activity Survey compiled using new statistical infrastructure. Estimates have been compiled on this new basis for each of 2001-02 and 2002-03. Effectively, a new statistical series has commenced with the 2001-02 collection.

The new infrastructure was described in Information Paper: Improvements in ABS Economic Statistics [Arising from The New Tax System] (cat. no. 1372.0), released by the ABS on 6 May 2002. The paper described a number of changes to the infrastructure supporting the compilation of ABS economic series. The changes make better use of data available from the taxation system to improve the efficiency, coverage and sample design of the surveys from which these series are sourced.

To facilitate comparisons over time, the effects of the infrastructure changes on the statistics have been measured, by showing data on both bases for 2000-01. For total mining, the estimates of Industry Value Added (IVA) on the new basis are marginally (0.9%) lower than those collected on the old basis, and the estimates of sales and service income are 4.3% higher. More details on the size of these effects can be found in Appendix 2.

Employment estimates (and related ratios) have not been included in this issue, due to methodological problems with deriving them from the taxation system data used. See Explanatory Notes paragraph 35 for details.

Details of Australia's mineral production shown in Chapter 4 are obtained from the various state and Northern Territory departments responsible for the collection of these statistics. See Explanatory Notes paragraphs 36-38 for more detail.

CANCELLATION OF 2001-02 ISSUE

This publication contains previously unpublished information for the mining industry for both 2001-02 and 2002-03. This is because the scheduled 2001-02 issue of this publication was not produced, due to delays caused by the introduction of the new statistical infrastructure mentioned above.

INFORMATION AVAILABLE ON-LINE

Information is available on-line via the Mining Statistics theme page. To access the theme page, go to the ABS web site home page https://abs.gov.au. Open the Industry link shown under THEMES (located in the left-side navigator "Quick links"), then open the Mining Statistics link shown under Industry.

INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or John Ridley on Sydney (02) 9268 4541.


CHAPTER 1 SUMMARY, 2000-01 to 2002-03


INTRODUCTION

The introduction of the New Tax System (TNTS) has had a number of significant implications for ABS statistics. Most of these changes affected the ABS Business Register (ABSBR) and, therefore, all ABS business collections which draw their populations from it. These changes have resulted in the adoption of a new statistical infrastructure. Because of this, data are presented for 2000-01 on an old and a new basis in Table 1.1.

Data shown on the "old basis" reflect the 2000-01 collection where data were collected from what the ABS refers to as management units. The "new basis" data reflect the new ABN unit / TAU based collections for 2001-02 and 2002-03. The "new basis" data also provide revised estimates for 2000-01, calculated as though the 2000-01 collection had been conducted on the same basis as the 2001-02 and 2002-03 collections.

For more information, see Explanatory Notes paragraphs 5-10 and Appendices 1 and 2. The Glossary provides definitions for terms used.

DETAILED COMMENTARY

Please see:

• Financial operations: Chapter 2, page 9
• Industry performance measures: Chapter 3, page 32
• Mineral production: Chapter 4, page 36

INTRODUCTION

Statistics in this Chapter relate to all subdivisions of the mining industry as classified by the Australian and New Zealand Standard Industrial Classification (ANZSIC). These data are presented at the ABN unit / TAU level and, therefore, can contain data about activities normally associated with industries other than mining. (See Explanatory Notes paragraphs 5-19 for further details). The commentary refers to summary tables 2.1 and 2.2, with more detailed tables following. The Glossary provides definitions for the more specific terms used.

SUMMARY

Selected indicators for the Australian mining industry showed increases, in current price terms, from 2001-02 to 2002-03. These increases related to sales and service income (up 6.5%), industry value added (up 6.2%), trading profit (up 4.4%), earnings before interest and tax (up 20%), operating profit before tax (up 27%), net worth (up 17%) and net capital expenditure (up 72%). The increases occurred despite lower export prices for a number of mineral commodities, and the negative income effects of a higher Australian dollar between these years.

The Minerals Council of Australia's Minerals Industry Survey Report, 2003 reported that average US dollar world mineral prices rose by 4% during 2002-03. This increase was partly driven by a recovery in commodity demand due to renewed economic activity in Asia, particularly China. However, with the Australian dollar having risen in value by about 12% between 2001-02 and 2002-03, this translated into a 9% fall in the Reserve Bank of Australia's Australian dollar non-rural commodity price index in the same period.

Export earnings for iron ore, nickel, LPG, diamonds and gold were higher in 2002-03, as reported in ABARE's Australian Mineral Statistics. These commodities recorded increases in export earnings of between 3% and 27%, reflecting a combination of increases in export volumes and higher average export prices. In particular, US dollar prices for nickel and iron ore increased by 30% and 12% respectively during 2002-03 - largely due to stronger demand for these commodities in Asia. Oil export earnings remained relatively static during 2002-03. While world oil prices increased by more than 20% over the previous financial year, reflecting international concerns over disruption of oil supplies, the increased prices were offset by the stronger Australian dollar and decreased oil production from several Australian oil fields.

Export earnings for black coal fell by 11%. The decrease was largely due to a 16% fall in export earnings for steaming coal, reflecting a 23% decrease in average export price which more than offset a 9% increase in export volume. Export earnings for zinc and copper also fell by 7%. Zinc prices fell 3% in US dollar terms during 2002-03 and by 13% in Australian dollar terms. However, the fall in copper export earnings resulted from an 8% decrease in export volumes. In the gold industry, production costs decreased with considerable corporate restructuring as well as increases in productivity.

SELECTED INDICATORS, Coal mining, Oil and gas extraction and Metal ore mining(a)

The coal mining industry's sales and service income increased by $1.4b (9.1%) to $16.9b despite a decline in coal prices during the 2002-03 financial year, as a significant number of coal producers reported for the year ending December 2002 (see Explanatory Notes paragraph 21 for more details).

The value of sales and service income for the oil and gas extraction industry remained relatively unchanged at $17.2b. Sales and service income for the metal ore mining industry increased by $1.1b (6.3%) to $18.9b, predominantly due to a large increase in the gold ore mining industry. The continued restructuring of the gold ore mining industry led to an increase in the value of sales and service income of $1.0b (21%) to $5.9b. Other mining experienced a $629m (19%) increase to $4.0b in the value of sales and service income over the previous year. Within the services to mining industries, sales and service income increased by $813m (14%) to $6.5b during the reporting period.


INDUSTRY VALUE ADDED

In value terms, national production as measured by IVA increased by $2.2b (6.2%) to $37.6b in 2002-03. IVA for the coal mining, oil and gas extraction, and metal ore mining industries increased by $1.6b (5.1%) to $33.3b.

Contributing 40.5% to total mining IVA, the oil and gas extraction industry was the most significant contributor to IVA in 2002-03 recording a value of $15.3b, which was relatively unchanged compared to 2001-02. IVA for the metal ore mining industries increased by $1.0b (12%) to $9.7b, and by $467m (6.0%) to $8.3b for coal mining.

TRADING PROFIT

Total trading profit for the mining industry in 2002-03 was $34.7b, an increase of $1.5b (4.4%) over the previous year. For the coal mining, oil and gas extraction and metal ore mining industries, trading profit rose by $1.1b (3.8%) to $31.0b. The coal mining industry recorded an increase in trading profit of $351m (4.8%) rising to $7.7b in 2002-03. Trading profit for the oil and gas extraction industry remained relatively unchanged at $14.6b. Improved prices for a number of commodities as well as increases in production assisted the metal ore mining industry to achieve an increase in trading profit of $720m (9.0%) to $8.7b in 2002-03.

EARNINGS BEFORE INTEREST AND TAX

EBIT increased by $3.2b (20%) to $19.0b for all mining industries. EBIT in the coal mining, oil and gas extraction and metal ore mining industries increased by $3.2b (22%) to $18.1b in 2002-03. The coal mining industry reported a decrease in EBIT of $311m (7.2%) to $4.0b, while EBIT in the oil and gas extraction industry decreased by $416m (4.3%) to $9.3b during 2002-03. Within the metal ore mining industry, EBIT increased by $4.0b (518%) to $4.7b, following corporate restructuring after significant asset write-downs in a small number of component industries in 2001-02. In 2002-03, EBIT for other mining was relatively unchanged at $884m.

OPERATING PROFIT BEFORE TAX

Overall movements in OPBT essentially mirrored those in EBIT, although they differed for individual industries. OPBT for all mining industries increased by $3.6b (27%) to $16.7b in 2002-03. OPBT for the coal mining, oil and gas extraction and metal ore mining industries increased by $3.6b (29%) to $16.1b. OPBT for the coal mining industry decreased by $282m (7.1%) to $3.7b, while OPBT in the oil and gas extraction industry was relatively unchanged at $8.7b. The metal ore mining industry recorded an increase in OPBT of $4.2b to $3.7b. OPBT for other mining was relatively unchanged at $752m.

NET CAPITAL EXPENDITURE

Total net capital expenditure for the mining industry in 2002-03 was $8.6b, up by $3.6b (72%) on the previous year. Net capital expenditure for the coal mining, oil and gas extraction and metal ore mining industries increased by $3.6b (77%) to $8.3b. Expansion of operations in the coal mining industry contributed to an increase in net capital expenditure of $688m (65%) to $1.7b.

Renewed spending on several large projects led to increases in net capital expenditure in the metal ore mining industry and the oil and gas extraction industry. Net capital expenditure in the oil and gas extraction industry increased by $324m (13%) to $2.8b. Net capital expenditure in the metal ore mining industry increased by $2.6b (226%) to $3.7b. Iron ore mining and, to a lesser extent, gold ore mining were the major contributors to the increases in expenditure for the metal ore mining industry.

STATE AND TERRITORY SUMMARY

The following analysis relates to ANZSIC subdivisions 11-14 (COAL MINING, OIL AND GAS EXTRACTION, METAL ORE MINING and OTHER MINING) only. ANZSIC subdivision 15 (SERVICES TO MINING) is excluded from the analysis.

Table 2.16 summarises sales and service income and IVA data for each state and territory for 2001-02 and 2002-03. This includes state and/or territory estimates for businesses which operate across more than one state or territory, based on additional data supplied by those businesses (see Explanatory Notes paragraph 31 for more details).

Sales and service income

Between 2001-02 and 2002-03, sales and service income increased for New South Wales and the Australian Capital Territory, Queensland, South Australia and Western Australia. Western Australia recorded the largest percentage and absolute increase, rising $2.9b (13%) to $24.6b. Queensland recorded a $1.1b (8.9%) increase to $13.9b, while New South Wales and the Australian Capital Territory recorded a $896m (11%) increase to $8.9b. Victoria recorded the largest absolute decrease, falling $1.1b (18%) to $4.9b, while the Northern Territory recorded the largest percentage decrease, falling 26% ($796m) to $2.3b.

In 2002-03, Western Australia accounted for 43% of sales and service income for the total mining sector, followed by Queensland at 24%; New South Wales and the Australian Capital Territory contributed 16% of the total.

Industry value added

The increased sales and service income in 2002-03 contributed to corresponding increases in IVA. In absolute terms, Western Australia recorded the largest increase, a $2.3b (15%) rise to $17.4b. New South Wales and the Australian Capital Territory recorded a $916m (26%) increase to $4.5b while Queensland recorded a $429m (7.0%) increase to $6.5b. In 2002-03, Western Australia contributed 50% of industry value added for the total mining sector with $17.4b. Queensland contributed 19%, followed by New South Wales and the Australian Capital Territory at 13%.




CHAPTER 3 INDUSTRY PERFORMANCE MEASURES

INTRODUCTION

A range of performance measures, usually expressed as ratios, can be produced from the data available from businesses' statements of financial performance and position. A selection of these are presented in this Chapter for the various mining industries. Information about the uses and limitations of these measures can be found in Explanatory Notes paragraphs 24-30.

PERFORMANCE RATIOS

The following principal features of the mining industry's performance ratios for 2002-03 appear in detail in tables 3.1-3.3:

• For the total coal mining, oil and gas extraction, and metal ore mining industries, trading profit margin was steady at 59%, the ratio of IVA to selected labour costs was relatively unchanged at 6.4 times, and increases in the ratios relating to fixed capital expenditure reflect major outlays on assets associated with the commencement of several large projects.
• The oil and gas extraction industry recorded a decrease in the ratio of IVA to selected labour costs from 19.7 to 17.6 times, while the trading profit margin remained relatively unchanged at 85%.
• For the metal ore mining industries, the ratio of acquisitions to disposals of fixed assets increased from 2.8 to 43.5 times, reflecting the major outlays referred to above, while the trading profit margin remained relatively unchanged at 46%.
• Of all industries shown, the industry showing the highest values for ratios of trading profit and interest coverage was oil and gas extraction.

TRADING PROFIT MARGIN, selected industries(a)

Readers should exercise caution when using these data, as:

• definitional requirements vary, as does the range of commodities upon which royalties are payable: the states and Northern Territory do not necessarily apply common definitions and standards when compiling the statistics;
• significant variations exist between states in the way in which value of production is attributed, particularly for metallic minerals. For example, New South Wales and South Australia estimate the value based on metallic content. Tasmania provides only a breakdown of the value of its mining production by major group, and so details about the value of each commodity are not available.
• the level of information available for construction materials and other non-metallic minerals varies considerably. For products such as crushed and broken stone, some states are unable to provide a breakup. It should be noted that the production of construction materials may be understated in several states because royalties are not always collected or the activity occurs on private land.

For further information, see Explanatory Notes paragraphs 36-38. Paragraph 38 also includes website and publication details of the sources.

SUMMARY

The recorded value of mineral production for Australia was $51.7b for 2002-03 (noting the qualifications described above). Of the four mineral categories, coal, oil and gas was the most significant with a value of $29.7b, its largest components being bituminous black coal ($11.3b) and crude oil ($7.9b). Metallic minerals was the second largest category, with a value of $19.0b. The recorded value of other non-metallic minerals was $1.6b and of construction materials, $1.3b.

In 2002-03, the largest producer was again Western Australia (with 46.3% of the Australian total), followed by Queensland (with 23.6%), then New South Wales (with 13.1%).

Mineral commodities produced(a)
	NSW	Vic.	Qld	SA	WA	Tas.	NT	Aust.
	$m	$m	$m	$m	$m	$m	$m	$m
2001-02	7,861.7	4,565.6	12,453.6	1,694.1	22,037.1	471.1	2,687.9	51,771.1
2002-03	6,764.9	4,307.1	12,226.5	1,682.6	23,938.7	473.3	2,328.3	51,721.4
(a) Reported by state and Northern Territory departments with responsibility for mineral production statistics (see Explanatory Notes paragraphs 36-38). Values of some commodities are not available, and are not included in these data (see tables 4.2 and 4.8 for details).

New South Wales

New South Wales total production in 2002-03 was $6.8b, of which 73.2% ($5.0b) was generated by the coal mining industry. Production of coal decreased marginally (2.4%) but the value of production decreased by 19.6%, reflecting price decreases and the impact of the stronger Australian dollar. Despite decreases in production and lower prices, silver-lead-zinc production remained a major contributor to New South Wales production, accounting for $416m during the year.

Victoria

In 2002-03, Victoria contributed 8.3% of Australia's value of minerals produced, with a recorded value of $4.3b. Coal (brown), oil and gas accounted for 88.9% ($3.8b) of Victorian production, the major contributors being crude oil ($2,068m) and natural gas ($696m).

Queensland

In 2002-03, Queensland was again second to Western Australia as the nation's largest mineral producer, contributing nearly a quarter ($12.2b) of Australia's production. Over 60% ($7.5b) of Queensland's production was of black coal, while copper contributed $1.4b. Queensland's production of phosphate rock increased to 1.9 million tonnes in 2002-03, with a value of $131m.

South Australia

South Australia contributed 3.3% of Australia's value of minerals produced in 2002-03, with a recorded value of $1.7b. Copper production fell by 2.2% in quantity and 8.2% in value, to $477m. Natural gas, mainly from the Cooper Basin, contributed $346m to the total value of production for the state.

Western Australia

Western Australia, with a value of $23.9b in 2002-03, continues to record the highest total value of production of the states and Northern Territory. The metallic minerals sector contributed $12.0b. Higher prices due predominantly to increased demand in Asia, led to increases in the value of production of the major commodities. Iron ore ($5.2b) and gold bullion (doré) ($3.4b) were the main contributors. The value of production of nickel increased in 2002-03 to $2.0b. Western Australia also has significant production of oil and gas. While production of crude oil decreased by 7.6% in 2002-03, higher world oil prices saw the value for crude oil production remain flat at $4.3b. The value of production of liquefied natural gas increased 18.6% to $3.1b. In 2002-03, Western Australian diamond production was valued at $771m.

Tasmania

The value of mineral production in Tasmania was $473m for 2002-03, representing just under 1% of Australia's total production. Over 85% of this consisted of metallic minerals, including iron ore pellets ($104m) and gold bullion (doré) ($99m).

Northern Territory

In the Northern Territory in 2002-03, 56.5% of the total value of production was attributable to oil and gas, and 41.4% to metallic minerals. The value of production of crude oil fell by 16% to $1.3b, owing to production falls (27% decrease), increases in oil prices and the impact of a stronger Australian dollar. This, as well as a 51.5% decrease in zinc-lead concentrate (to $106m), contributed to the 13.4% decrease in the total value of production in the Northern Territory to $2.3b in 2002-03.