Metallurgical and Materials Transactions System †Free Samples to Stud

Question: Discuss about the Metallurgical and Materials Transactions System. Answer: Introduction Australian economy is one of the largest economies in the world. From GDPs point of view country is in a stable position, here various industries contributed various portions to GDP. Countrys mining industry is identified as one of largest industry, however over the years different results has been obtained regarding the mining industry. The main aim of this report is to explore the iron ore mining industrys contribution to GDP level with a view to different changes that affected country, how these changes hampered iron ore mining industry and in turn how iron ore mining industry hampered economys growth level is a matter of concern of this report. Australian economy is a developed economy with one of the largest mixed market economy. It is also considered as one of the wealthiest nation across the globe. Australia also stands in the eighth position with respect to the estimated value of natural resources. The value of natural resources is high inside country because of its geographical location. According to World Bank data, GDP of the country over the years has remained in a stable position. Poverty rate estimated within country is also low. OECD report shows that Australia over the years has grown at a rate of 3.6 percent in the past fifteen years. Country introduced indirect tax system in 2000 and it mainly included goods and service tax. Revenue was mainly generated from personal and company income tax. From the labor force scenario of the country it can be observed that the number of underemployed is high, even unemployment rate over the years increased and it mainly constitutes youth unemployment and this of unemployment is a major problem faced by the economy because the countrys advancement of technology, the aging population increased. From inflation rate point of view it can be seen that countrys inflation level over the past years has been quite high. From export bundle of the country it is seen that it is mainly exporter of agricultural products, energy in the fo rm of liquefied natural gas and coal and minerals. Trading partners of the country consists of Japan, US, South Korea, China and New Zealand. Contribution of mining industry to GDP Iron ore mining industry of the country is the most significant industry of Australia and the main reason behind this is the presence of natural resources inside country. Industry contributed to the highest level of economic growth since 1840s. Mining industry as a whole thus had major influence on Australias performance. Currently this industry contributes around 8.5 percent to Australian GDP. Thus this industry can be regarded as the primary industry. Various kinds of ores and minerals are mined throughout the country. This industry generates around $138 billion per year and this result is half of total goods and services. Iron ore mining industry approximately employs 200,000 people and in this way it benefit people indirectly, and thus creates economic and social wellbeing welfare. Industry also it also creates high skilled and high paid jobs for citizens of the country; hence it helps to build careers and ensures more youth population. Regional economic activity of the country is also supported by this industry. Thus iron ore mining offers huge scale employment opportunities to citizens and has been at the front position of Australia. Taxes and royalties from iron ore industry are main source of income for the populations and governments, with $25 billion in taxes and royalties acknowledged in the 2013-2014 financial year. With respect to export of the industry a rapid growth is being observed within the industry. Total production of the iron ore industry increased by 2% between 2006-07 and 2007-08, and doubled between 1987-88 and 2007-08. Past 10 financial years shows , the largest decrease in production took place in 2003-04 on the other hand the largest annual increase achieved in 2006-07. Production in the services to iron ore industry shows small percentage of total mining production. However, the net value of services to mining is more and this indicate some services was given by businesses classified to other industries such as construction. The significance of the iron ore mining industry in terms of production fluctuates across the states and territories. Total factor income which is a portion of state production shows that total payments received by labor and owners of capital from iron ore has been utilized in the production of the goods and services. The period 1997-98 to 2007-08 shows that Northern part of the country experienced changes in import due to the input of the industry to total state production, varied from 13 percent in 1998-99 to 35 percent in 2000-01. Iron ore mining industry during 2008 accounted for percent of total production in the Northern part. While in Western Australia, the contribution of the industry varied from 19 percent in 1997-98 to 29 percent in 2007-08 .The iron ore mining industry's portion of Queensland overall production augmented from 6 percent and 11 percent in the period 1997-98 to 2007-08. In 2007-08, the industry accounted 10 percent contribution to state production. Iron ore with respect to other minerals contributed 50 percent of total production to the economy as a whole. The mining boom provided lift to the living standards of average citizens of Australia, not just those who worked in the sector but to all who are not linked with the industry. As a result wages grew by 6 per cent more across the economy and household expenditure was 11 per cent higher that is equal to over $100 per week for the ordinary household. Governments role in iron ore mining industry Australias ministry of resources work together to address the misperceptions about the mining industry. Government here created an environment that is specially owed to business and this environment is expected to create facilitates in investment and expands productivity of the industry. Tax on mining and carbon tax has also been abolished by the Australian government. Government also established $100 million for Exploration Development Incentive for backing rural sector and this is done by making tax offsets. The status of infrastructure here shows that it mainly expand output at present mines and plans inaugurate new mining provinces by the government. Across the nation government invested in record levels of infrastructure. In Australia ,two centers are devoted to the resources sector. One sector is METS industrymining equipment, services and technology; the other sector is for gas, energy and oil resources. Australia has the best METS industries across the globe.In Australia, ove r fifty percent of the companies, $90 billion METS sector export their goods and services, with present exports beyond $27 billion of sectors revenues. In Australia, partnerships between government and industry have developed over many years through a range of formal and informal mechanisms. Australian Government is dedicated to create a strategy structure in order to expand Australia's resource base, expand its global competitiveness and improve the regulatory regime. The current programs administered by Resources Division of Australia are: Exploring for the Future: Australian Government has declared $100 million of Australian dollar for the Exploring of the Upcoming programme to increase exploration investment in Australias resources sector. The Exploring for the Future programme will create the next generation of pre competitive geoscience data, with an emphasis on targeted areas of northern Australia and parts of South Australia. It will expand Australias long term exploration prospects and address deteriorating onshore Greenfield exploration activities. Extractive Industries Transparency Initiative: Government also declared it would implement the fiscal transparency principles of the Extractive Industries Transparency Initiative (EITI), a global standard for improved transparency and liability in the oil and mining sectors. EITI is a voluntary mechanism which endorses and provides backings for developing governance in resource-rich nations through the full publication and authentication of company payments and revenues of government from oil ,mining and gas. By linking the EITI, Australia confirms that its national approach is reliable with global efforts to expand transparency, containing in tax systems. This will give noteworthy paybacks for Australian companies through better global investment surroundings resulting from reliable and open reporting principles for the worlds resources sector. Among the lsit of supporters, Australia is the largest supporters of the EITI, with more than $20 million since 2007. This has encompassed a id for the EITI Secretariat, as well as the World Bank EITI Multi-Donor Trust Fund, which was proven to support emerging countries implementation of the EITI (Person,2013). Gas Acceleration Program: The accessibility and price of gas have been recognized as significant risks for Australian business competitiveness and cost of living pressures. Predicted supply shortfalls combined with other factors, including linking to international export markets, state and territory bans, aging infrastructure are resulting in a higher new gas price and constrained availability. Sustainable Development Program for the Mining Industry: This program mainly promotes sustainable development and self-regulation of industry through the active acceptance of leading principles. The program is directed by the ?Department of Industry, Innovation and Science in partnership with the Department of Foreign Affairs and Trade. Thus Australian government is trying best to support the industry and reason behind this support is, over the years the mining industry has served very well to the entire nation and these programmes undertaken by government must address the issue that crop up with the industry. Impact of several changes on Australian iron ore mining industry Several factors affect Australian mining industry in a large extent some changes help the industry to grow while there are some factors that decreases the productivity level of the industry. Value of AUD decrease 10 percent: if dollar depreciates against major foreign currencies, then it is expected that exports increases, as Australian produced goods become cheaper from abroad. The influence on current-dollar imports is more uncertain: Depreciation mainly increases the dollar cost of a specified volume of imports, but the volume may decline to the degree that domestic goods and services are replaced for imports in reaction to the rise in the relative cost of purchases from overseas (Webster,2012). However the drop in exchange rate, then drop in value of Australian dollar will provide relief to miners who battle with the high costs and low commodity prices. As a result of decrease in value of AUD, mineral commodity price will drop. As a result of change in price export of the industry will increase, while the import will become costly. Thus fall in exchange rate will take place and this is the main reason of depreciation of the currency. Thus industry faces boom period due to its increase in export. Inflation rate increases to 5 percent: As a result of decrease in value of Australian dollar the inflation rate will increase and this follows mainly the cost push inflation. Cost push inflation is mainly an outcome of decrease in value of AUD. In such a scenario again the fall in exchange rate will try to regain its value in order to maintain stability of the economy. Increase in inflation rate also increases the standard of living of the country by making it difficult for the weaker populations to survive (Tonts, Plummer and Lawrie,2012). Global price of oil increase rapidly to US $100 / barrel: Rising oil price creates cost pressure on many mining companies. Australias several-fold, totally transformed the economics of the industry with the increase in oil price. Metal prices will fall and few new metal mines were opened - Australian production augmented largely because of capacity rises at existing mines to realize economies of scale. Unemployment increases by 10 percent: this increase will take place due to several factors that are influencing Australian economy. The main reason of this increase may be accredited to fall value of Australian dollar, because as result of fall in value of dollar the exports of the industry increased and since prices of export fall while that of import rise , companies will lay off employers in order to achieve its economic growth. This lay off will increase the number of unemployed. Lower unemployment rate accompanied with higher energy prices is mainly a outcome of the mining boom. The outcome of a change in the unemployment rate is highly persistent . Thus the unemployment effect will begin to control the economy. Unemployment rate may also increase due to aging population of the country and this increase is mainly due to advancement of technology. All changes occur together in a year Now if the above mentioned events take place simultaneously within the country then it will affect the countrys growth by hampering the stable position of the country. When dollar value falls it impacts countrys economy in a large scale, and it is shown below with help of a diagram. The above diagram shows the impact of value of dollar on an economy. Now if the supply of dollar remain constant while the demand falls i.e, its value falls then the exchange rate will also fall , thus depreciation of dollar takes place. As a result of this depreciation the countrys export level increases while the import increases. Inflation is a sustained rise in the price level. Inflation can come from both the demand and the supply-side of an economy. If this inflation rate increases then it impacts economy in a large scale by making it harder for population of the country to cope up with the problems. As soon as the inflation increases, price of the commodities increase and as result of this increased price level , cost push inflation may crop up. This will lead to an rise in the costs of raw materials and other components. Rising labor costs is also a outfall of increased inflation level - caused by wage increases, which are greater than improvements in productivity. Wage also rises. Indirect taxes also increase, this will affect the value added taxes. Depending on the price elasticity of demand and supply for their products, dealers may select to pass on the load of the tax onto consumers (Benndorf and Dimitrakopoulos, 2013). Increase in oil price globally affects the mining industry in a large scale and this is due to the fact mining industry too uses the oil indirectly. For transportation purpose mainly mining industry requires oil. If this price of oil increases then it will impact on the demand of resources , the demand will fall as a result the price of other commodities will increase again this increased price level will create problem to the miners because it would be difficult for them to buy raw materials at a higher price(Gaudin, A.M., 1957). Now finally if unemployment increases within the country then it will adversely affects mining industrys growth level, this is due to the fact mining industry is mainly driven by human powers not by the machine powers. Mining activities require lots of labor, with growth this industry does provided jobs to several households in Australia, but as soon as the industry faces turmoil it is obvious that it will affect the economy in a negative manner (Duuring,2012). Thus it can be observed that the events that are mentioned are interrelated in a huge sense and this is because as soon as the dollar value decreases it creates inflation inside the economy and it directly affect the mining industry by making the raw materials price high. On the other hand inflation created falls employment rate and this is because as soon as the price increases companies generally lay off workers in order to meet their profit. Hence if these events occur then they will trigger again and again , the government must make rigid regulations to address these problems which deteriorate the performance of the mining industry (Yellishetty and Mudd, 2014). Conclusion Thus the study on the mining industry gives a in depth result about the activities inside the industry in a large scale. Mining industry which is considered to be the booming industry of Australia have changed its status over the years and this happened due to several factors that the mining industry faced. Previously mining industries contribution was the highest but with time industrys contribution began to fall and this fall shows a significant result on the GDP level As soon as the GDP fall this impacts the overall growth of the economy. Although with respect to human development index Australia stands in the second position but the changes that happened within the mining industry which was previously regarded as the most impact full industry of Australia have changed its position inside the economy (.Beers,2007) Australias mineral endowment has funded considerably to the countrys national wealth and development, and should continue to do so into the predictable future. However, substantial dependency on natural resources presents profits and threats for domestic wealth. In this situation, Australia must refurbish its vision for the iron ore mining industry and allied modernization that supports its performance (Wilson, 2012). Effective macro-economic policy that instantaneously confirms long-term efficiency from the mineral endowment, while implementing innovative governance and boosting mineral exploitation from other fonts and materials efficiency among consumers, will be essential for Australia to maximize long-term nationwide profit from the mineral endowment. Focusing on and upgrading sustainability matters as probable limitations to production will be necessary in ensuring long term productivity (Deegan, C. and Blomquist, C., 2006 ) Iron ore production in Australia is currently unsustainable, because of resources being finite, but because of impacts linked with extraction and processing. Peak mineral production increases the spectre of resource exhaustion, and the compulsion to begin to plan for transition in the way minerals and metals are created, used and reused in society (Wills, B.A. and Finch, J., 2015.). As a chief supplier of minerals and metals to the world economy, Australia can play an important role in leading and boosting sustainable production, use and governance of mineral resources. As a start, improving traditional manufacture with other mineral and metal sources will not only fund to Australias ability to maximize long-term wealth from minerals by decreasing the countrywide economic dependence on in-ground mineral resources, but it would also lift capacity, innovation, activity and international competitiveness in secondary sectors that is created to recognize value from in-use stocks and end-use mineral services (Evans, 2009). Thus if a person works in mining company the he should recommend the CEO that workers are to be insured in terms of turbulence that is faced by the economy. If they are not insured then with increasing unemployment rate the economys growth will decrease with a fall in GDP. The company should follow rules and regulations are laid down by government to support the industry. These government laws play an integral role at the time of turbulence faced. The company must ensure that inflation rate does not influence the industry so the country must prepare itself against the inflation rates up and downs problem. References Beers, D., Bossilkov, A., Corder, G. and Berkel, R., 2007. Industrial symbiosis in the Australian minerals industry: the cases of Kwinana and Gladstone. Journal of Industrial Ecology, 11(1), pp.55-72. Benndorf, J. and Dimitrakopoulos, R., 2013. Stochastic long-term production scheduling of iron ore deposits: Integrating joint multi-element geological uncertainty.Journal of Mining Science,49(1), pp.68-81. Deegan, C. and Blomquist, C., 2006. Stakeholder influence on corporate reporting: An exploration of the interaction between WWF-Australia and the Australian minerals industry. Accounting, Organizations and Society, 31(4), pp.343-372. 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