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Mining death greatly exaggerated

The latest challenge for the industry is that the high price of doing business in Australia and falling productivity could make that difficult.
The latest challenge for the industry is that the high price of doing business in Australia and falling productivity could make that difficult. Patrick Hamilton

REPORTS forecasting the death of Australia's mining boom are greatly exaggerated.

Forecasts that investment in new mine projects had reached its peak came from the Deloitte Access Economics report released on Monday, prompting claims Australia's resources industry may be on the slide within two years.

It stated, "The peak of the project pipeline is already in sight, meaning the key prop to the faster part of Australia's two-speed economy is looking less certain the further out you look - though there's still enough gas in the tank of huge resource projects to provide handy pipeline protection if Europe were to turn pear-shaped".

However, the Deloitte Access report went on to celebrate the success of the industry's success so far, even going as far to say there was "a deluge of dollars to come" from more mining investment.

For the industry as a whole, the report was even more positive.

"At the same time some sectors are still making a silk purse out of a sow's ear, with the stupendous strength in engineering work keeping the wider construction sector afloat," it said.

"And others still are just downright booming, with mining production growing at double digit rates (its fastest growth in more than two decades)."

Queensland Resource Council chief Michael Roche said demand for resources had slipped thanks to global financial concerns, plus historically high prices lured new exporters in the form of Mongolia and Mozambique amongst others.

"Australia's best path is to steer the middle ground by maintaining its reputations for reliability and quality, substituting volume for price," he said.

The latest challenge for the industry is that the high price of doing business in Australia and falling productivity could make that difficult.

Deputy Prime Minister and Treasurer Wayne Swan remained upbeat, spruiking the "half a trillion dollars" in projects planned nationally.

"Around half of that is already committed spending," Mr Swan said.

In Queensland alone there are 29 mining projects under construction and another 101 on the drawing board.

The federal Bureau of Resources and Energy Economics report from July also outlined the strength of the industry, drawing an upwardly sloping line for the industry to 2025.

The quango's report found energy coal and gas exports would almost double and metal-making coal exports will grow by one-third in less than 15 years.

It still represented incredible growth in a sector with a reputation for already growing too large to find enough workers.

In June, BREE resource manager said a delay in mining investment was not necessarily a sign to worry.

"If there are 29 under construction, then to maintain that flow of employment, we would have to continue activity at that level," he said.

"You would not want 100 more projects added to the current amount already under construction."

Topics:  deloitte access economics michael roche mining boom queensland resources council wayne swan


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