Australian miners are pessimistic about the future of the mining industry, which was responsible for the current economic boom of the country, in the next few years.
A survey made among 60 mining leaders in the latest Mining Business Outlook report, released Tuesday by Newport Consulting, found that 93 per cent of the executives find prospects for the industry's growth over the next one to two years extremely low or zero. Twelve months ago, only over 50 per cent had that outlook.
The leaders cited three factors behind their gloomy outlook. These are low commodity prices, low levels of demand and overly restrictive regulatory and bureaucratic environment.
Another 82 per cent said they lack confidence that large-scale projects would resume in the next 12 months, but could stretch to at least three to five years for new projects to develop.
This was confirmed by documents filed by mining giant BHP Billiton (ASX: BHP) with the federal Environment Department to secure approval for a trial plant that would test heap-leaching of copper and uranium ores at lower cost as an alternative to previous plans to expand the $30-billion Olympic Dam copper and uranium mine in South Australia shelved in 2012.
BHP estimated it would take four years for the trial plant's processing method to help make the project profitable, which would have involved digging the world's largest open pit mine.
In a statement, BHP said if it would secure approval for the plant, the construction of the demonstration plant is expected to start in the second half of calendar 2015, operation would start by late 2015, while the trial period is estimated to run for 36 months.
The mining officials also scored the Abbott government for its failure to deliver election promises to boost the mining sector, which David Hand, managing director of Newport Consulting, attributed to a perception that allowing a new mine to open would not win politicians votes.
"There is enormous bureaucracy in the mining industry today, filling out reports for government agencies who are simply wanting to have the information so that they themselves can sell to a skeptical public that the mining industry is not destroying the world," The Australian quoted Hand.
While mining leaders anticipated major changes to the mining sector under the Abbott government on its first year, 70 per cent said no adequate action has been taken yet nor campaign promises delivered despite the repeal of the carbon tax in July and ongoing efforts to repeal as well the mining tax.
The report added, "The consensus among mining leaders was that the regulatory environment is tough with too many hoops to jump through for mine development approvals."
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