The main economic activities on Christmas Island are the mining of low grade phosphate, limited tourism, the provision of government services and more recently the operation of the Immigration Detention Centre. The government sector includes administration, health, education, policing, customs, quarantine and defence.
The Australian Government supports economic development and enhanced business opportunities in the Indian Ocean Territories through the Community Development Grants Programme. The Australian Government also provides direct assistance to the Christmas Island Tourism Association (CITA).
George Clunies Ross and John Murray were granted the right to extract phosphate on Christmas Island in 1891, when the British Government offered them a joint 99 year lease in return for a small royalty. Small shipments began to be exported in 1895 and by 1897 they had formed the Christmas Island Phosphate Company.
Clunies Ross returned to the Cocos (Keeling) Islands and Murray became Chairman of the company. As there was no Indigenous population, a workforce had to be imported from Europe, Singapore, China and Malaysia. The first major shipment of phosphate was exported in 1900. In 1948 the mine was taken over by the Australian and New Zealand Governments, working in partnership with the British Phosphate Commissioners.
In the late 1970s the Australian and New Zealand Governments renegotiated their agreement for the provision of phosphate to the two countries. As part of the process, the British Phosphate Commissioners relinquished the management of the mine to the newly formed Phosphate Mining Company of Christmas Island in 1981. As deposits of preferred quality phosphate neared exhaustion the mining operation faced economic constraints and probable closure. The effects of drought and low phosphate prices led to a government decision to close the mine in December 1987.
In 1990 the mine was purchased by union workers and reopened as Christmas Island Phosphates, now known as PRL. PRL's main market is South-East Asia.
A conservation levy is collected by Department of Infrastructure, Transport, Cities & Regional Development from PRL. The department has entered into a Memorandum of Understanding with Parks Australia to use money raised from the conservation levy to rehabilitate old mine sites.