The Growing Pains of Aussie's Iron Ore Industry

Although Australia is the world's second biggest producer of iron ore, the last few years have not been easy for companies in Western Australia's Pilbara region (see map) where more than 90% of the nation's iron ore is produced. For at least two years, the industry has been plagued by dwindling markets abroad, production-crippling strikes at home, skyrocketing costs (well above the official 13% annual inflation rate), an acute shortage of investment capital, increasingly ferocious competition from foreign iron ore producers-and, as if all this weren't enough, by an over-valued currency that has caused incalculable damage not only to iron ore producers but to the entire mining industry of Australia. (This last problem was mitigated less than two months ago, on November 28, 1976, when the Australian dollar was devalued by a whopping 17 1/2%.)