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The Aussie economic model - export bulk raw materials to China, buy manufactured products back - is a curious inversion of the old British Empire economy. And i
by gaius 9y ago
The Aussie economic model - export bulk raw materials to China, buy manufactured products back - is a curious inversion of the old British Empire economy. And it's one that is not even remotely viable over the long term. Countries whose only source of wealth is raw materials get eaten alive by manufacturing economies, then left to rot when the mines are exhausted. There is a ton of historical precedent.
- dalbasal 9y agoI don't think it's an inversion. The British Empire got materials from far off places like australia in exchange for manufactured goods, made in the centres of civilization where all the people are. You don't see Norway making stuff, you need more people (or less minerals) for that.
- jpatokal 9y agoThe sheer scale of Australia means that they're not about to get exhausted anytime soon though. Only something on the order of 1% of the continent has even been prospected yet.
- wycx 9y agoFrom where are you getting the 1% figure?
- drodgers 9y agoThe best data I could find is here: http://www.ga.gov.au/scientific-topics/minerals/mineral-resources/iron-ore#heading-1 http://www.ga.gov.au/scientific-topics/minerals/mineral-reso... That document lists 51GT of 'accessible economically demonstrated' iron ore, with an production rate of 0.81GT per annum, and 86GT of inferred resources (ie. yet-to-be-prospected). So there's at least half a century of ore left, even if production ramps-up steadily. 1% prospected doesn't seem supportable though; it's more in the range of 50% based on the ratio of the inferred to known figures above.
- nikcub 9y agoAustralia will always have whatever resource is in demand next. Three lithium mines are coming online every year for the next few years starting this year. Australia will become the largest natural gas exporter - it will overtake iron ore in value in the next couple of years. Then you have tourism, education and becoming the food bowl for China's growing middle class Everyone likes to complain about being resource-export dependent but it has never been more than ~10% of GDP and is quiet an enviable position to be in
- emmelaich 9y agoYep, we have about 600 years of coal and a couple of centuries of gas, iron ore, uranium and god knows what else.
- andrewjl 9y agoCurious what you mean by eaten alive. Historically manufacturing was a sign of power and prestige, but now it's been commoditized in favor of financial markets and real estate, which is going fine in Oz. Countries that make things sell them for pieces of paper (or electronic bits) that aren't backed by anything except their and their countries marketability. The next wave of AI-driven manufacturing will decentralize things and you may well see this plant re-opened, albeit without people.
- User23 9y agoUnsustainable processes always end.
- TheSpiceIsLife 9y agoIt think it's safe to say that Australia will approximately never run out of iron ore.
- Avshalom 9y agoIt's not running out of 'X' it's 'X+extraction+shipping' vs local production. The USA for instance has all the rare Earth elements it could ask for, they just cost more to dig out than buying from China.
- ajeet_dhaliwal 9y agoTheir 'cousin' Canada is somewhat similar except replace 'China' with 'USA'.
- drodgers 9y agoYeah, but the vast majority of Australia's economy (just like the US and all other developed countries) is services, not resources or manufacturing or farming. We just talk about resources because they're a distinguishing feature. Mining is only 8.5% of Australia's GDP and 2% of its employment. Sure, it would suck for a few years if the whole sector vanished overnight, but it wouldn't cause long-term devastation.