The end of mining boom in Australia?

Debates are ongoing on whether the mining boom that has propelled Australia’s economy for the past decade is over. This concern was sparked by pronouncements by Australia’s Resources Minister Martin Ferguson that the unprecedented boom, which helped Australia dodge recession during the global financial crisis, have passed. Cited among reasons for the prediction are falling commodity prices, the gloom in the eurozone and weakness in the United States economy, as well as fears of slowing growth in China — a major market for iron ore and coal. However, analysts say that the lucrative scramble to unearth the vast nation’s resources is not over yet. A BBC writer said that delay in the construction of mine expansion by giant BHP Billiton may indicate that expansion efforts by industry players may have probably peaked, but this does not mean that the mining investment boom is over and that there are about another one to two years to run. The BBC said the pick up in export volumes flowing from the surge in mining investment in iron ore, coal and liquid natural gas will start to get underway around 2014-15. Nonetheless, realists are saying it’s about time Australia depends on other pillars of economic growth. Mining investments have accounted for roughly two percentage points in the country’s economic growth, while other sectors have suffered under the weight of higher-than-otherwise interest rates and a surge in the Australian dollar to 30-year highs.

Read more on Rappler and BBC.