PERTH (miningweekly.com) – The Bureau of Resources and Energy Economics (Bree) is forecasting a decline in resource investment in Australia, as the country transitions from the investment phase of the boom to the production phase.

The decline in investment is being fuelled by lower commodity prices and rising costs, which have created a more challenging investment environment and contributed to a decline in the number of projects moving through the investment pipeline.

In its biannual 'Resources and Energy Major Projects' report, published on Wednesday, Bree noted that, at the end of October, some 92 projects were at the publicly announced stage of the investment pipeline with a combined value of between A$110-billion and A$152-billion. The number of projects at the publicly announced stage has decreased by 21 since the end of April 2013, with a corresponding decrease in value of between A$12-billion and A$19-billion.

Projects at the feasibility stage have also been affected by market conditions and lower commodity prices. At the end of October, there were 162 projects at the feasibility stage with a combined value of A$208-billion. This is 12 projects and A$24-billion less than at the end of April 2013.

As at October, there were 63 projects at the committed stage with a combined value of A$240-billion compared with 73 projects with a combined value of A$268-billion six months earlier.

Bree reported that the decline in value was the result of a record period for projects moving to the completed stage, specifically “mega” projects valued at over A$5-billion.

“While the number of projects at the committed stage contracted, the six months to October 2013 saw 18 projects completed at a record A$30-billion,” said Bree deputy executive director Wayne Calder.

“The projects completed over the past 12 months have added considerably to Australia’s production capacity and will support strong commodity export volumes into the future. Australia is now seeing a transition from the investment phase of the resources boom to the production phase.”

Forward projections indicate that investment in the resources and energy sectors is likely to decline over the medium term. However, Bree believed that there remained an opportunity to sustain higher levels of investment should projects at earlier stages of development proceed through the pipeline.