According to a new report released by industry analyst and economic forecaster BIS Shrapnel , Australia’s mining sector will be booming again within three years.
The Mining in Australia, 2009 to 2024 report from BIS Shrapnel forecasts annual gross mining investment in Australia will surpass $50 billion by 2011/12 (in constant 2006/07 prices) and will rise to over $60 billion by 2013/14.
BIS Shrapnel says that development of multi-billion dollar projects in the oil and gas, iron ore, coal and copper sectors will boost the industry.
Growth in Australian mining production is expected to pick up strongly across most commodities in 2009/10, and accelerate in subsequent years as global demand improves and several years of investment in new capacity begins to bear fruit. BIS Shrapnel is forecasting the real value of mining production will rise 30 per cent over the five years to 2013/14, compared to an increase of just two per cent in 2008/09.
Adrian Hart Senior Manager of BIS Shrapnel’s Infrastructure and Mining Unit said “The global recession has dented minerals demand momentarily, but the long term outlook for key commodities is still strong. While we are forecasting a decline in mining investment to play out over the next 12 to 18 months, the extent of the decline is now expected to be relatively mild considering the four-fold increase in mining investment since 2002. Over the next five years, strong growth within the Asian region will be a key source of demand for our resources assets and commodity prices will remain well above long term levels.”
Noted in the Mining in Australia report from BIS Shrapnel, is that rising production and the return of strong investment growth will also bring back the same problems which previously constrained the boom in mining. These include equipment shortages, skills shortages, inadequate levels of exploration, capacity constraints in key rail and port transport chains and a squeeze on necessary maintenance work.
Hart says action needs to be taken now so that Australia can maximise the benefit from the next upswing in the minerals cycle.
The Mining in Australia report from BIS Shrapnel identifies prospects for each commodity, with a detailed outlook for global markets and prices, including implications for investment, production, contract mining and asset maintenance in Australia.
Hart explains that the outlook for mining varies considerably by commodity and region within Australia, with steel-driven and energy commodities such as oil, gas, coal and iron ore having the brightest prospects during the next five years. The recovery in investment for base metals such as nickel, silver, lead and zinc is not expected to arrive until after 2012/13.”