Expansion plans by Australian mining companies have hit a 10-year low due to falling minerals prices, according to a new government report released Wednesday.
In the six months to October, just three new projects worth 597 million Australian dollars (510 million U.S. dollars) reached the committed stage, the lowest number and value of projects in a decade, the Bureau of Resources and Energy Economics (BREE) said.
“Declining commodity prices have continued to weigh on investment decisions with many developers revisiting project feasibility studies amid weaker than expected prices,” the bureau said in a statement.
Prices of coal are the lowest in more than half a decade, and iron ore is down 48 percent this year. Oil and copper prices have slipped 25 percent and 11 percent, respectively.
To offset the minerals decline, there has been a gas-investment boom after the discovery of vast quantities of resources off Australia’s north-western coastline.
The find has Australia on course to overtake Qatar as the world ‘s biggest exporter of LNG by the end of the decade. “Investment in the Australian resources and energy sector is projected to moderate in the medium term as the large LNG projects are completed,” the report said. “Projects currently progressing through the development pipeline are unlikely to be of a scale sufficient to offset the reduction in investment associated with the completion of the ‘mega’ LNG projects.”
via Economic Net