JOHANNESBURG (miningweekly.com) – The pendulum is starting to swing towards a revival in the mining industry, with Australian executives more upbeat about the outlook for the next 12 months, according a survey released on Tuesday.
The latest ‘Mining Business Outlook’ report, released by Newport Consulting, showed that 43% of mining leaders were optimistic about the prospects for the year ahead. This was a significant increase from 2014, when confidence hit an all-time low.
“This is the first time in three years that the industry is clearly showing signs of a revival – not just a flicker of life but a distinct positive shift in sentiment and outlook,” said Newport Consulting MD David Hand.
“Companies are spending again, have more confidence in stabilisation of prices, and have prioritised growth strategies. It’s a fine line, however, as at the same time, the industry wants to see government take a proactive stance in reducing red tape, especially surrounding mining and project approval processes, which are seen to hamper growth and Australia’s ability to return to a more competitive position globally.”
The report highlighted a number of indicators pointing towards an industry revival, including increases in capital expenditure (capex), with 27% of companies either planning to moderately or significantly increase capex in the next 12 months. Of those leaders, 31% plan to increase spend by up to 15%.
Leaders also displayed signs of confidence around price stabilisation, with one in two leaders expecting prices to remain the same for the next 12 months. Further, companies reducing staff have decreased significantly from 80% to 44% for the year ahead. There was also a sharp increase in the number of companies not making any changes to their hiring plans, while 8% of leaders said they would be hiring.
However, leaders have warned that the rosy outlook could be dampened if certain government regulations were not changed.
Nearly one-quarter of leaders interviewed warned the government that it needed to address certain regulations and red tape; particularly the project approval process.
The Newport Consulting media release included commentary from Hancock Prospecting chairperson Gina Rinehart, who called on government to “significantly and urgently reduce regulations, permits, licences and compliance cost burdens that are placed on Australia’s resource industry”.
She said without action from government, Australia would continue to see declines in exploration and investment, instead of growth, and warned that the country would suffer the consequences that reduced exploration and investment brought.
“The time to act is now before further opportunities are lost,” Rinehart urged.