The New South Wales Minerals Council’s latest expenditure survey has found that the 23 participating mining companies directly injected $10.8 billion in the state’s economy in 2015/16.
The survey covers the last financial year, prior to the recovery in commodity prices that has since boosted activity and confidence across the mining sector.
The $10.8 billion in direct spending in 2015/16 included $2.6 billion in wages to 20,990 full-time employees with $6.9 billion spent on purchases of goods and services from 8078 local businesses, community contributions and payments to local government. $1.3 billion was spent in taxes to the NSW Government, including royalties.
Despite covering a period when the industry was experiencing a cyclical downturn the level of direct spending by NSW mining companies was only slightly down on the previous year, and higher than the spending levels recorded in the same survey four years earlier, according to the Minerals Council.
In further encouraging signs for the NSW mining sector, there was a nearly five per cent increase in the number of state supplier businesses in the mining supply chain during the survey period.
Total direct mining spend in the Sydney region was again strong at $2.4 billion in 2015/16, accounting for 23 per cent of the state’s total mining spend. This makes Sydney NSW’s second largest mining region for direct spending for five consecutive surveys.
“Most people don’t realise the strong connection Sydney has with mining, but there are many suburbs of Sydney, particularly in Western Sydney, that are home to hundreds of local businesses that are part of the mining industry supply chain,” NSW Minerals Council chief executive officer Stephen Galilee said.
“For example, the local government area (LGA) of Parramatta received $362 million in direct mining spending on purchases from 112 local supplier businesses and another $89 million was spent by mining companies in the Fairfield LGA, up $24 million on the previous year, and supporting 98 local businesses.”
The Hunter remains the beating heart of the state’s mining sector, accounting for $4.8 billion or 45 per cent of direct expenditure by mining in NSW.
Mining contributed 24 per cent of gross regional product (GRP) in the Hunter region, up slightly from the previous financial year.
This survey, now completed for a fifth year, demonstrates the scale of mining’s contribution and the importance of mining to the broader NSW economy, as well as the resilience of the industry during a prolonged period of economic downturn, the Minerals Council stated.
“While total spending is down slightly on the previous year, it’s still higher than when the so-called mining boom started in 2011-12. Over the last three years mining has directly spent $35.7 billion in NSW,” Galilee said.
“And with the dramatic improvement in commodity prices since the survey was taken, and record exports of coal from the Port of Newcastle, mining will continue to make a strong contribution to NSW, underpinning the strength of our state economy.”
The full results of the survey will be released in the coming weeks.