End of Oz mining investment boom to impact on economy – Treasury
PERTH (miningweekly.com) – The Australian mining industry’s shift from an investment to a production phase would have a significant impact on the country’s economy, federal Secretary to the Treasury Dr Martin Parkinson said on Wednesday.
Speaking at the Association of Mining and Exploration Companies (Amec) Convention in Perth, Parkinson noted that the unprecedented investment, stemming from the mining boom, had been a major driver of Australia’s two decades of continuous economic growth.
“To meet demand from our trading partners, mining investment increased from less than 2% of gross domestic product pre-boom to almost 8% in the last financial year.
“This has seen the capital stock in the mining sector triple since the boom began,” Parkinson said.
He told delegates that an additional 180 000 workers had been employed in the sector, with several more jobs created in related industries.
However, Parkinson pointed out that Australia was now at a critical point in the mining boom’s evolution, adding that as commodity prices peaked in 2011, Australia was likely to have passed the peak of capital investment.
“We now find ourselves moving into another stage of the boom, which features rising production and export volumes, but falling prices and investment. Given the sheer magnitude of the investment boom, the economy will face some challenges in navigating this transition.”
The Secretary pointed out that in the short term, the net resources investment would shift from being a major contributor to economic growth, to becoming a detractor from growth.
Exports would increase as completed projects went into production, but Parkinson said that the net effect of these two forces meant that the Australian economy would become heavily reliant on other sectors outside of the mining industry, to return to a trend of growth, over the medium term.
He said that focus would need to shift to raising the productivity in the other economic sectors as a measure of guaranteeing economic growth.
“The shift in phase of the mining boom will result in a boost to our labour productivity as more projects come on line and move towards full production,” Parkinson added.
Some 16% of Australia’s current production is generated from the resources sector, and Parkinson said that this productivity turnaround would have a sizeable impact on national productivity. However, he warned that it would not lead to commensurate increase in income, as around 80% of the resource investment was funded from overseas.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation