An overview of the Australian Mining Industry AMN, Thursday 10 October 2013

1. An overview of the Australian Mining IndustryAMN, Thursday 10 October 2013

2. Australian Economy • The economy of Australia has a GDP of US$1.57 trillion. Australia's total wealth is $6.4 trillion • In 2011, it was the 13th largest national economy by nominal GDP terms and the 17th-largest measured by adjusted GDP, about 1.7% of the world economy • The Australian economy is dominated by its service sector, comprising 68% of GDP

3. Australian Economy • 2011 - Minerals and fuels made up 50.6% of Australia’s trade market, reaching $158.7b • 2011 - Iron Ore and Coal collectively reaching roughly $100b in exports, nearly one third of Australia’s export market • 4 of the world’ s 9 most highly rated banks are Australian

4. Australia & Africa • 200+ mining companies with over 700 projects in Africa • Australia is pursuing membership with the AfDB and African Development Fund to support efforts in Africa • Bilateral trade with Africa has increased annually by 6% over the past decade, currently at $9.7b • Currently holds MoU’s with South Africa, Botswana, Mozambique, the Gambia and Nigeria

5. Size of Australia’s Mining Sector • Australia’s mining industry has an investment pipeline of $430 billion • In the 2011/2012 Financial year, exports of Australian minerals (excluding oil and gas) reached roughly A$164 billion • The Australian mining industry accounts for between 8 – 10 % of GDP

6. Size of Australia’s Mining Sector (Cont.) • The Australian mineral industry, in recent years, has accounted for around 50% of national exports • It has also accounted for 20% of business investment • Mining (inclusive of oil and gas) R&D expenditure has more than doubled in the past decade, reaching $4.1 billion in the 2011/2012 FY

7. Mining Sector Breakdown • Australia has the worlds largest reserves of brown coal, mineral sands, nickel, lead, uranium, iron ore and zinc • Also holds the worlds second largest reserves of bauxite and tantalum • Australia is currently home to the world’s third largest reserves of copper

8. Mining Sector Breakdown (Cont.) • Australia holds the World’s fourth largest reserves of silver • Direct employment in the mining industry in August 2013 was 249,000 • 95% of workers in the industry are full time employees • Australia may hold the largest reserves of certain minerals, however it may not be the largest producer

9. Mining Sector Breakdown (Cont.) • Largest private sector employer of indigenous Australians • As at May 2013 average full time earnings was $2, 477 per week • Since 2001-02, more then $145 billion payed in company income tax and royalties

10. Markets Supplied – Asia Pacific • Due to Australia’s geographical location, it is in a prime position to supply the Asian market • China, Japan, South Korea and India are the main markets Australian mining supplies • Very important markets to be able to supply, with their large populations, these countries are large scale consumers of minerals (especially coal and iron ore) • Important consumer with the coming of the “Asian Century” as these countries are becoming economic superpowers (primarily China)

11. Australian Mining Sector Challenges • High input costs involved in mining in Australia • Mineral resources tax and carbon tax directly impact mining industry • Company income tax and royalties already equal $20 billion a year not including the mineral resources tax and carbon tax • High industry costs also making trade with Australian minerals less attractive