Ain’t No More Australian Mining Golden Era
Can there really still be a mining boom for Australia in the future? Or should it better take stock of inventories and salvage what it can from an overrated golden mining era?
Australia has some A$500 billion ($486 billion) worth of projects in the pipeline. Investments in engineering and construction alone are seen to jump this year by 36 per cent and in 2012/13 by 20 per cent.
Demand from China and other Asian countries will continue to support Australia's mining boom for some time, but realistically speaking, everything has a culminating point. And for the Land Down Under, that could mean anytime soon.
While Australia enjoys its largest mining investment boom since the 1860s yet, "it can't go on growing at that rate, and it can't stay at those sort of levels," David Gruen, executive director of Australia Treasury's macroeconomic group, told a parliamentary hearing on Thursday.
Suffice to say, Australia's golden era in mining won't hold longer as the country and its miners probably wants it, as investment in resource projects would trickle after July 2013, Mr Gruen pointed out.
"Our expectation is we're not going to see continued growth at anything like this rate beyond 2013."
"It seems very likely that the level of investment in the mining sector may come down somewhat, but after all, it is in the clouds at the moment ... (and) we think it is something that will be with us for some considerable time," he said.
China, the world's second-biggest economy, and Australia's main fuel for its mining boom, although it will still surely continue to post positive economic growth rates, will undeniably however go through periods of volatility.
"In a sense, the golden bit is over. But the golden bit was never going to last forever," said Treasury Secretary Martin Parkinson.
China will continue to grow thanks to its urbanisation and industrialisation, but countries dependent on its economic movements may experience otherwise.
"It is not going to be smooth," Mr Parkinson said.