[REPORT] Mining Stimulates Growth with Rise in Exports

The mining industry has been a driving force for Australia’s economic growth figures which grew at 1.1 percent for the three months to March.

According to official national account figures released on Wednesday, the annual growth rose 3.5 percent, the fastest rate in nearly two years and above the average of the past decade. Almost 80 percent of the growth for the quarter was contributed by the mining sector.

During the first quarter of 2014, prices for some of Australia’s most important commodities fell, showcasing the importance of the export growth underway in the iron ore industry.

Five of Australia’s largest iron ore miners, BHP Billiton, Rio Tinto, Fortescue Metals Group, Arrium Limited and Atlas Iron, have significantly increased exports helping push the standard iron ore price down by more than 30 percent.

Another report published on Wednesday showed that Port Hedland, Australia’s largest iron ore port, increased exports by 3.55 percent between April and May, setting a monthly record with over 36 million tons. That number could grow as further as BHP and Fortescue plan to export more in the June quarter.

And while the news sounds hopeful for Australia’s economy, experts aren’t buying it.

According to Deutsche Bank chief economist Adam Boyton, rising exports from a small number of companies won’t solve all of Australia’s challenges. Because exports and resources are not very labor intensive, they do little to support employment and wage growth.

BHP, Fortescue and Rio Tinto have all vowed to continue growing exports for years to come.

The value of iron ore exports should reach $76.8 billion in fiscal 2014, up from $57.1 billion, according to the Bureau of Resources and Energy Economics.

Aside from mining, construction and financial services were the biggest suppliers of growth for Australia.