Ferguson Insists Mining Boom Not Yet Over in Australia
By Vittorio Hernandez | August 24, 2012 1:48 PM EST
Minister for Resources Martin Ferguson belied on Friday speculations that Australia's mining boom is coming to an end. While recent decisions by resource companies indicate a slowdown based on shelving or cancellation of multibillion-dollar projects, there are many ongoing ventures as well as newly approved applications that show the sector is still robust.
He pointed to the $270-billion ongoing investments which is the envy of the word. However, Mr Ferguson acknowledged that the days of record commodity prices had ended even as the construction boom, particularly in the energy sector, continues.
Even if BHP Billiton scrapped its $40-billion expansion plans for the Olympic Dam copper mine expansion and a new harbor, GVK of India had its $10.4-billion coal mine and rail project the day after BHP's announcement. Other miners such as Rio Tinto and Fortescue are still optimistic for strong demand for Australian commodities in the future.
Muswellbrook Shire Mayor Martin Rush backed Mr Ferguson, citing continuous heavy investment of mining firms in Hunter Valley. He cited three extensions or expansions pending with the state government as proof.
Speaking from the financial side, Reserve Bank of Australia (RBA) Governor Glenn Steven shared Mr Ferguson's assessment that the mining boom is not yet over.
"I probably describe myself as cautiously optimistic. I have tried to get people to see the glass half full rather than half empty because I do think we risk talking ourselves into more gloom than we really should," Mr Stevens told Parliament.
Paul Dowd, chair of the Resources and Engineering Skills Alliance (RESA), described Australia's experience as not a traditional mining boom but a super cycle previously not experienced in history.
"This 'Super cycle' presents both opportunity and challenge, South Australia has the opportunity to prepare itself via relevant, timely and high quality education, skills and training to ensure we make the most of the opportunities," Mr Dowd said in a statement.
He pointed out that there are 20 mines in operation in South Australia with significant staff attraction and retention while the BHP shelved expansion is just one of 30 mines in advanced stages of development in the state. Mr Dowd said the combined value of the 29 other projects have greater net worth than the BHP venture.
"RESA believes that the effort to establish pathways for students into the mining sector, the up-skilling and training for job seekers and those looking to enter the mining sector should not only continue but be re-doubled. We have been given an opportunity to take this time to train South Australians so that they are a ready workforce to service the growing list of mining ventures and its allied activities and hopefully in the not too distant future an expansion of Olympic Dam," Mr Dowd added.
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