Thinking of Buying a Mining Business in Australia? Here Are 3 Vital Questions to Ask

 

Australia’s mining industry generated $437.3 billion in revenue in 2025, with profits totalling $134.7 billion and a strong 30.8% profit margin across 7,400 enterprises employing over 223,000 workers.

 

Despite short-term headwinds from falling commodity prices, the sector remains one of Australia’s largest and most globally competitive. The country is the world’s leading exporter of iron ore, coal, and liquefied natural gas (LNG), and a growing producer of lithium, nickel, and copper, key inputs for renewable technologies.

 

While revenue is forecast to decline 3.1% annually through 2030, strong output growth and increasing demand for critical minerals and green energy metals are expected to underpin long-term value creation for well-managed operators.

 

1. Is the Business Financially Strong and Diversified Across Commodities?

 

Why It Matters:

 

Mining businesses are highly exposed to global price cycles. Those with diversified commodity portfolios or exposure to “future-facing” metals are better positioned to ride out downturns in coal, oil, or iron ore.

 

What to Check:

• Revenue structure – Iron ore alone contributes over 30% of industry income, followed by coal (24.5%) and oil and gas (22.9%).

• Profit margins – Average margins are around 30.8%, but can fluctuate sharply with commodity prices.

• Operating costs – Wages ($42.9 billion in 2025) and rising fuel costs continue to pressure profits.

• Diversification – Copper, gold, and lithium mining are offsetting weakness in coal and LNG exports.

• Customer mix – China accounts for over 40% of exports, so businesses with broader export markets (Japan, South Korea, India) are more resilient.

 

2. Does the Business Have Competitive Scale and Strategic Market Position?

 

Why It Matters:

 

Mining success depends on access to high-grade resources, efficient transport links, and economies of scale. Larger operators achieve lower unit costs and secure long-term export contracts.

 

What to Check:

• Market leaders – The top producers, BHP (11.9% share), Rio Tinto (10.7%), Fortescue (5.7%), and Glencore (5.2%), collectively generate one-third of total revenue.

• Geographic focus – Western Australia dominates with 98.9% of Australia’s iron ore output, and also leads in nickel, gold, and lithium production.

• Scale and automation – Major mines in the Pilbara, such as BHP’s South Flank and Rio Tinto’s Gudai-Darri, are fully automated, using AI-driven trucks and rail systems to reduce costs and improve safety.

• Infrastructure access – Proximity to ports, rail, and energy sources remains a key competitive factor.

• Strategic alliances – Joint ventures with global partners spread risk and improve capital access.

 

3. Is the Business Aligned with the Future of Sustainable and Green Mining?

 

Why It Matters:

 

As global demand for clean energy accelerates, mining operations producing lithium, copper, nickel, and rare earths are becoming central to the renewable economy. Companies investing in low-emission production and digital optimisation are better placed for growth.

 

What to Check:

• Critical minerals strategy – Australia’s Critical Minerals Strategy and the $1 billion Green Iron Investment Fund aim to expand domestic processing of low-emission metals.

• Automation and AI – Miners like BHP are using digital twinning and predictive analytics to reduce costs and enhance safety.

• Environmental compliance – Operators face increasing regulatory oversight and royalty rates, such as Queensland’s 40% coal royalty tier and new gas price caps.

• Energy transition readiness – Demand for green iron, low-emission steel, and battery-grade nickel will drive future profitability.

• Workforce adaptation – The industry employs 223,756 workers, with increasing demand for tech and engineering skills to support automation and sustainability initiatives.

 

Ready to Invest in a Thriving Mining Business?

 

Australia’s mining sector remains one of the world’s most profitable and technologically advanced, underpinned by abundant natural resources and strong export infrastructure.

 

Future success will rely on diversification into green metals, cost control through automation, and sustainable practices that align with the global energy transition.

 

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