The end of a mining boom leaves Australia’s economy surprisingly intact

A GOLD rush in the late 19th century so enriched Charters Towers, an outback town in the state of Queensland, that it opened its own stock exchange. Trading ceased long ago. But the grand building still stands, its barrel-vaulted portico supported by eight slim pillars. Over a century later, Queensland is reeling from the demise of another mining boom. “There was a perception it would go on forever,” says Liz Schmidt, mayor of Charters Towers. But unlike so many other booms, this one has not ended in a national bust. Australia’s multi-pillared economy is still standing.

Given the violence of the commodity cycle, Australia’s resilience is remarkable. At its height, mining investment accounted for 9% of GDP (see chart). As the economy scrambled to meet China’s demand for iron ore and coal, Australia’s terms of trade spiked. The price of its exports, relative to its imports, reached the highest level since the gold rushes of the 1850s, according to Philip Lowe, governor of the Reserve Bank of Australia, the central bank.