Budget 2013/14 Northern Territory Economy
Tabled paper 295
Tabled papers for 12th Assembly 2012 - 2016; Tabled papers; ParliamentNT
Tabled by David Tollner
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Department of the Treasury and Finance
120 Mining and Manufacturing 2013-14 Budget Background The mining industry in the Territory has a large impact on the economy through trade, investment and employment. It is the most significant contributor to gross state product (GSP) in the Territory (19.8percent in 201112) compared with 9.7percent nationally (see table above). The manufacturing industry in the Territory is largely dominated by the production of liquefied natural gas (LNG) from the ConocoPhillipss Darwin LNG plant and alumina manufactured from Pacific Aluminiums mine in Gove, hence the mining and manufacturing are dealt with together. Despite mining being one of the largest contributors to the Territory economy, the capitalintensive nature and nonresident status of a significant proportion of the labour force mean that the industry comprised only 3.4percent (4900 persons) of resident employment in 201112. This number does not include flyin flyout workers who are usually resident in other jurisdictions and can comprise a substantial proportion of the workers at some mines. While the number of people employed directly by the industry is relatively low, the industry is responsible for generating employment in a number of other industries such as trade, transportation, manufacturing and technical services. % of GSP % of Employment New South Wales 3.2 1.3 Victoria 2.3 0.5 Queensland 10.4 2.8 Western Australia 34.6 8.3 South Australia 4.3 1.3 Tasmania 1.7 1.8 Australian Capital Territory 0.1 0.1 Northern Territory 19.8 3.4 Australia 9.7 2.2 Source: ABS Cat. Nos 5220.0, 6291.0.55 Measuring Mining Commodity prices are subject to substantial cyclical movements determined by supply and demand, exchange rate movements, inflation and inventories. Movements in commodity prices influence the nominal value of mining production. To reflect the underlying level of output and activity, this chapter focuses on the value of real production, derived by holding constant the effects of price over time. Commodity prices are also an important determinant of production. Higher prices can make previously nonviable deposits profitable and encourage producers to increase production or expand operations in order to maximise profits, while lower prices may deter additional production or affect the financial viability of an operation. Most of the Territorys mineral and energy commodities are sold on global markets in UnitedStates (US) dollars. As a result, movements in the Australian dollar/US dollar exchange rate can impact the nominal Table 10.1: Contribution of Mining to GSP and Employmentin201112 Exchange Rates
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