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Australian Resource Investment to Surge

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"Mining set to soar as Chinese demand approaches Australia's doorstep."

Mining Weekly, Esmarie Swanepoel

Mining would, for the first time ever, outstrip investment in the rest of the economy during the coming financial year, Federal Treasurer Wayne Swan said on Tuesday.

Speaking at the International CEO Forum, in Canberra, Swan said that in resources alone, investment has gone from A$35B in 2009/10 to more than A$50B in 2010/11.

"This is expected to increase even further in 2011/12, to a record A$83B—eight times greater than what it was before mining boom mark I."

Swan noted that on top of this, a recent report from the Australian Bureau of Agriculture and Resource Economics and Sciences (Abares) estimated that the pipeline of investment in resources alone has reached A$430B.

"There's no question that this investment will bring enormous opportunities and economic benefits to our country. But for Australia, it is only the first manifestation of the changing weight in the global economy," Swan said.

The Treasurer noted that the most likely demand for Australia's mineral resources would come from Asia, with middle-class consumers in Asia expected to outnumber those of the rest of the world combined, by 2020.

"Many Australian businesses are already looking to take advantage of these opportunities," Swan said.

Swan's estimation of the resource investment potential was supported by earlier information released by Abares, which stated that capital investment in the mining sector had reached its all-time high at A$173.5B.

At the end of April, there were 94 projects at an advanced stage of development, the government research agency stated in its latest mineral and energy development project listings.

Of the 94 projects, 33 were either newly committed or entered the list at an advanced stage during the previous six months. The total capital expenditure for these projects was 31% higher than the October 2010 list, Abares said.

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