A new report from BIS Shrapnel has forecast a surge in mining production over the next four years as the mining industry’s focus shifts away from the investment and construction phase of the boom.
A new report from BIS Shrapnel has forecast a surge in mining production over the next four years as the mining industry’s focus shifts away from the investment and construction phase of the boom.
A new report from BIS Shrapnel has forecast a surge in mining production over the next four years as the mining industry’s focus shifts away from the investment and construction phase of the boom.
The independent economic forecaster and industry analyst said that despite a 40 per cent collapse in mining investment over the next four years, the mining sector would continue to grow.
“Mining production is forecast to surge by one third over the same period, driving a corresponding increase in mining operations activities, maintenance and exports,” BIS Shrapnel said in a statement.
It warned miners and the related services industry would face a challenging environment created by low prices, a high Australian dollar, weaker growth in export demand and relatively high costs.
BIS Shrapnel senior manager Adrian Hart said while investment had already fallen sharply across coal, iron ore and other commodities, it was the boom in gas which drove the peak in investment in 2013-14.
“Without oil and gas, mining investment would have fallen 25 per cent in the last financial year,” Mr Hart said.
“However, the completion of a large range of large gas projects on the east and west coasts will be the key driver of the long slump in investment from here.”
Mr Hart said the economy was expected to remain weak before recovering after the middle of the decade, with public investment set to fall further through the current financial year and with most industry sectors not yet needing to invest to cater for strong demand growth.
That being said, the report pointed out that a boom in mining production, operations and maintenance would carry through the next five years.
“In Western Australia, the value of mining production will overtake that of the entire Australian manufacturing sector during 2014-15. This is the new face of the mining boom in Australia,” Mr Hart said.
The report’s author, BIS Shrapnel economist Rubhen Jeya, said there were challenging times ahead for miners and industry contractors, however, the end of the current boom in mining investment would still present opportunities in other parts of the industry.