Australia's natural resources

Australia is one of the world's largest coal producers and exporters. In addition, Australia’s other mineral resources, climatic resources, and hence the resources provided by the soils and the associated agricultural products are significant in the global economy. These include wool (mainly from sheep); meat products from beef, sheep, and lamb, crops such as cotton, pineapples, sugarcane, wheat, corn, and oats; and a flourishing wine industry.

The Country

Australia, in the area called Oceania, is a continent between the Indian Ocean and the South Pacific Ocean. Its Aboriginal people are thought to have arrived from Southeast Asia during the last ice age, at least fifty thousand years ago. At the time of European discovery and settlement, up to one million Aboriginal people lived across the continent as hunters and gatherers. They were scattered in 300 clans and spoke 250 languages and 700 dialects. Each clan had a spiritual connection with a specific piece of land but also traveled widely to trade, find water and seasonal produce, and conduct ritual and totemic gatherings. Despite the diversity of their homelands—from Outback deserts and tropical rain forests to snow-capped mountains—Aboriginal Australians all shared a belief in the timeless, magical realm of the "Dreamtime." These spirit ancestors continue to connect natural phenomena—as well as past, present, and future—through every aspect of Aboriginal culture and resources.

European settlers arrived in 1788. These settlers took advantage of the continent’s natural resources to develop agricultural and the manufacturing industries. Australia transformed itself into an internationally competitive, advanced market economy based on the vast quantities of natural resources, particularly mineral resources. Described in 1964 by author Donald Horne as "The Lucky Country," Australia is ranked highly in many economic categories. However, from 2009 to 2022, the government’s energy statistics showed a substantial decline in total production of oil. As of 2022, Australia’s economic demonstrated resources (EDRs) of zinc, lead, nickel, mineral sands (ilmenite, rutile, zircon), tantalum, and uranium were the world’s largest. In addition, its reserves of bauxite, black coal, brown coal, copper, gold, iron ore, lithium, manganese ore, niobium, silver, and industrial diamond ranked among the highest worldwide.

Long-term concerns for Australia's natural resources include climate change issues, such as the depletion of the ozone layer, more frequent droughts, and management and conservation of coastal areas, especially the Great Barrier Reef. Only 6 percent of the land is arable, including 27 million hectares of cultivated grassland. Permanent crops occupy only 0.04 percent of the total land area. Australia is the world’s smallest continent but its seventh-largest country in terms of area, with the population concentrated along the eastern and southeastern coasts. The city of Perth, on the west coast of Australia, is one of the most isolated cities in the world. Of the total population of Australia, 86.6 percent was urban in 2023.

Minerals

Minerals have had a tremendous impact on Australia’s human history and patterns of settlement. Alluvial gold (gold sediments deposited by rivers and streams) spurred several gold rushes in the 1850s and set the stage for Australia’s present demographic patterns. Beginning around the time of World War II, there has been almost a continuous run of mineral discoveries, including gold, bauxite, iron, and manganese reserves as well as opals, sapphires, and other precious stones.

The Australian minerals industry is an industry of considerable size and economic and social significance, benefiting Australians both directly and indirectly. The mining and minerals-processing sectors underpin vitally important supply-and-demand relationships with the Australian manufacturing, construction, banking and financial, process engineering, property, and transport sectors.

Australia is among the world’s largest exporters of black coal, iron ore, and gold. It has also held the status of the leading producer of bauxite and alumina (the oxide form of aluminum, Al₂O₃) and is a top producer of uranium, lead, zinc, iron ore, nickel, manganese, gold, black coal, silver, copper, and aluminum. However, only a handful of major mineral discoveries were made in the late twentieth century. In an attempt to reverse this trend, mining companies stepped up exploration efforts both in existing areas of mineralization and in areas that had attracted limited exploration investment.

In addition, the mining industry directly and indirectly employs hundreds of thousands of Australians (many of whom are in sparsely populated, remote regions of Australia) and is responsible for significant infrastructure development. For example, starting in 1967, the mineral industry built twenty-six towns, established twelve ports, created additional port bulk-handling infrastructure at many existing ports, built twenty-five airfields, and laid more than 2,000 kilometers of railway line.

Coal

By 2020, Australia had become one of the world’s largest coal producers of coal and, as of 2022, maintained proven coal reserves of 150.227 billion metric tons, according to the World Factbook; however, this industry developed from a humble beginning in Newcastle. Now a metropolitan center of the country, Newcastle first exported coal to Bengal in 1799, after the resource was discovered by a convict, William Bryant. In 1801, a penal settlement known as “Coal River” was established.

Historically, coal had been one of Australia’s major mineral exports. In 2023, revenue from coal totaled 0.78 percent of the country’s GDP and accounted for nearly 34 percent of Australia’s export earnings. By 2022, Australia produced 465.865 million metric tons of coal and exported 364,589 million metric tons, according to the World Factbook.

Almost all of Australia’s export production coal deposits are located in Permian-age sediments (250 million years old) in the Bowen basin in Queensland and the Hunter Valley basins in New South Wales. Western Australia has some producing mines south of Perth. Australia also has reserves of lower-grade lignite coal, located in Victoria. Coal is exported from nine terminals at several ports along the east coast.

Australia’s coal industry was dominated by four companies in the twenty-first century: BHP (formerly BHP Billiton), Anglo American (UK), Rio Tinto (Australia-UK), and Xstrata (Switzerland). BHP Billiton was the world’s largest supplier of seaborne-traded hard coking coal from its predominantly open-cut mines at its low-cost asset base in Queensland and New South Wales. Xstrata was the world’s largest exporter of thermal coal. Coal properties owned by Rio Tinto produced low-sulfur steam coal for electricity generating stations, metallurgical coking coal for iron and steel mills, and coal for international trade from nine properties mainly located in Queensland and New South Wales. Anglo Coal Australia was one of Australia’s leading coal producers, with extensive coal-mining interests and prospects.

Nickel

The Western Australian shield is rich in nickel deposits. They were first discovered near Kalgoorlie in south Western Australia in 1964. Small quantities of platinum and palladium have been extracted side-by-side with nickel reserves. The majority of Australia’s nickel production occurs in the West.

Until 1998, only sulfide ores were used for nickel extraction. These are deep and associated with volcanic rock. Newer projects use laterite ores (oxides), which are cheaper to mine because of improved technologies, including high-temperature and high-pressure acid leaching, ion exchange, and electrowinning to produce an almost pure (99.8 percent) nickel at one site. These developments shifted the center of world production away from Canada to Australia.

Uranium

Beginning in the 1930s, the Australian uranium industry developed substantially, evolving to make Australia one of the world’s largest producers of uranium in 2022. Australia’s vast, low-cost uranium resources accounted for 28 percent of the global inventory of uranium, with more than 1.6 million metric tons of known recoverable resources. Australia’s uranium resources are also known for having a relatively low cost of extraction compared to that of other nations.

The resources are distributed in a fairly clustered manner throughout Australia, with three-quarters of the known and inferred resources found in South Australia and more specifically at the Olympic Dam, the world’s largest deposit. Other significant resources have been found in Northern Territory, Queensland, and Western Australia. Australia’s uranium is exported only to countries that have committed to nuclear safeguard agreements.

Gold

Gold production in Australia, which was very important in the past, has declined from a peak production of 4 million fine ounces in 1904 to several hundred thousand fine ounces in modern years. Most of the gold is extracted from the Kalgoorlie-Norseman area of Western Australia.

Opals and other Precious Stones

Australia is well known for its precious stones, particularly white and black opals from South Australia and western New South Wales. Sapphires and topaz are mined in Queensland and in the New England District of northeastern New South Wales. The state of South Australia has earned an international reputation as the largest producer of precious opal in the world, and opal was adopted as that state’s mineral emblem in September, 1985. The Burra copper mine was once a significant source of gem-quality malachite, and chrysoprase has been produced from Mount Davies. However, only opal and jade are mined commercially, the latter from extensive deposits near Cowell.

Gem-quality or precious opal is distinguished from common opal by a characteristic play of spectral colors. Precious opal is classified according to the body or background colors of the gem and the color pattern. South Australia produces about half of the Australian output of gem opal; the major production fields are Coober Pedy, Mintabie, and Andamooka. Since 1915, the major opal-producing center has been Coober Pedy. The opal workings comprise numerous large fields extending 30 kilometers northwest and 40 kilometers southeast of the town. Mining is carried out by individuals and small syndicates generally equipped with bulldozers, or underground tunneling or bogging machines, in conjunction with pneumatic jackpicks and explosives.

Oil and Natural Gas

The oil and gas industry is an important contributor to the Australian economy and employs thousands of people. By 2023, Australia was one of the largest natural gas producer in the world, with over 151.7 billion cubic meters produced in 2023. The first Australian oil discoveries were in southern Queensland. Australia’s total petroleum production amounted to 386,000 million barrels each day in 2023 and included pumping from oil fields off northwestern Australia near Barrow Island, in the southern part of the Northern Territory, and fields in the Bass Strait.

Iron Ore

Australia has billions of metric tons of iron ore reserves, which totaled 37.6 percent of the world’s total iron ore resources in 2022. Most of Australia’s substantial iron ore reserves are in Western Australia, which accounted for 92 percent of the nation’s total production in 2022. The Pilbara region of Western Australia is particularly significant, with 85 percent of Australia’s total identified resources and 92 percent of its production. Locally significant iron-ore mines also operate in the Northern Territory, South Australia, Tasmania, and New South Wales. In 2020, Australia’s iron ore production was 900 million metric tons, ranking it as the top producer in the world.

Agriculture

Australia’s climate can rightly be regarded as a real resource, although in times of drought the climate may have a distinctly negative impact on agricultural resources. Rainfall patterns across Australia are highly seasonal and vary considerably from year to year and decade to decade. Compared to the other continental landmasses, Australia is very dry; more than 80 percent of Australia has an average annual rainfall of less than 600 millimeters. Because of this aridity, Australia suffers from leached, sandy, and salty soils. The continent’s largely arid land and marginal water resources represent challenges for conservation and prudent environmental management. The challenge is to maximize the use of these resources for human beings while preserving ecosystems for animal and plant life. However, 2022 was an outlier in terms of national rainfall, with an increase of 26 percent from the typical 600 millimeters. This was the ninth-wettest year for Australia on record.

Farming is nevertheless an economically and culturally important part of life in Australia. In 2023, 55 percent of land in Australia was used for agriculture. Many Australians are directly or indirectly involved in farming, and for those not directly involved with farming, the country’s rural and agricultural history still has strong links to the heritage and culture of Australia. In the first few decades after Europeans arrived in Australia, farms developed around the early settlements, and farmers grew wheat crops and raised sheep that had originally been imported from Europe.

Government-sponsored exploration during the 1800s opened up new tracts of land, and farmers gradually moved inland and occupied huge areas of pasture. The creation of railways, beginning in the 1850s, began to connect more remote farmers with their markets, making it possible to transport produce to cities and ports more easily and quickly.

The dry climate and infertile soil of Australia presented challenges to farmers from the start, but they quickly determined that the country was well suited for production of high-quality wool. Wool became the cornerstone of Australian agriculture, and Australia is often said to have "ridden on the sheep’s back" through the early days of its economic development.

By the early part of the twentieth century, Australia’s agricultural production had rapidly increased and output expanded well beyond the needs of the Australian population. This increased production led Australia to become one of the world’s major food exporters. Across much of the early twentieth century, the Australian government provided assistance to farmers and primary producers in the form of bounties, to encourage production, employment, and export. The government also placed tariffs on some goods to discourage imports.

The relative importance of farming to the Australian economy decreased in the second half of the twentieth century; at the beginning of the twenty-first century, only 2.5 percent of the country’s population was employed in farming. Government assistance has been reduced, and wool is no longer such a significant and valuable commodity. Nevertheless, agriculture remains an important sector for the Australian economy, generating billions of dollars in gross value each year and employing hundreds of thousands of people across Australia. Farms in Australia have traditionally been family businesses, passed on from generation to generation. However, beginning in the 1950s, international economic factors and changes in farming methods led to larger farms being more economically viable than small ones. The number of farming families in Australia has steadily decreased and the average size of farms has increased.

Different types of farming are concentrated mainly in the areas that suit them best, depending on water availability and climatic conditions. The grazing of livestock (mainly sheep and cattle) takes up the most land in Australian agriculture. Sheep are found primarily in New South Wales, Western Australia, and Victoria. About 90 percent of all cattle are used for beef. Queensland and New South Wales are Australia’s main beef cattle producers, with the Northern Territory contributing about 10 percent of the beef cattle market. Dairying occurs mainly in the southern states, predominantly in Victoria.

Between 2020 and 2021, 34 percent of Australian agriculture was crops such as wheat, grain, and cotton; 16 percent was the cultivation of fruits, vegetables, and other horticulture; 42 percent animal agriculture; 7 percent fisheries and forestry. Wheat and other grain crops are spread fairly evenly across New South Wales, South Australia, Victoria, Western Australia, and Queensland, and sugarcane is a major crop in Queensland and New South Wales. Fruit growing and vegetable growing occur in all states. According to the International Trade Association, around 70 percent of agriculture production was exported annually.

Other Resources

Australia is also extremely rich in zinc reserves, the principal sources for which are Mount Isa and Mount Morgan in Queensland. The Northern Territory also has lead and zinc mines and vast reserves of bauxite (aluminum ore) near Weipa on the Gulf of Carpentaria and at Gove in Arnhem Land.

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