Australian Mining Projects Being Shelved At An Alarming Rate
MetalMiner | Sep 18, 2012 02:49AM ET
We wrote not long ago about the robust state of highly paid jobs and have been rising, up 133,000 since 2007, while those in manufacturing had been falling, down 65,000 over the same period.
Observers fear the industry is at a tipping point, with project cancellations or delays seen so far being only the tip of an iceberg that has yet to reveal itself as projects are reviewed by lenders fearful at the collapse in metals prices.
Among those already delayed are BHP’s Olympic Dam copper mine expansion, its Outer Harbour iron ore expansion, and its Peak Downs coking coal expansion, together worth over $40 billion.
Meanwhile Fortescue Metals Group, which had planned to triple iron ore output to 155 million tons a year by mid-2013, did an about turn last week, delaying nearly half that expansion to save $1.6 billion.
Resources Minister Martin Ferguson told reporters he expected further announcements. Projects at risk include 33 iron ore programs with a combined capacity of 465 million tons, equivalent to about a year of Australia’s output, and 73 coal projects with a combined capacity of 522 million tons, 50 percent more than produced in 2011.
The minster recognized that LNG projects would to some extent make up for the sharp drop in inward investment in the mining sector; what has caught the industry and government by surprise is the speed of the change.
The fall in mining investment cannot be made up overnight by an increase in the energy sector. In the meantime, many are praying the current bounce in prices forms a new upward trend, but investors do not appear to be banking on it.
by Stuart Burns
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.