Major Mining Projects and Investment - Bureau of Resources and

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Major Mining Projects and Investment - Bureau of Resources and Powered By Docstoc
					Major Mining Projects and Investment

                Presented at the ‘State of the Nation’
                                         19 June 2012
                                    Professor Quentin Grafton
                           Executive Director/Chief Economist
          Bureau of Resources and Energy Economics (BREE)




                                                  bree.gov.au
Overview
• The Mining Boom – Price and Volume
  Trends
• Major Mining Projects – Trends and
  Prospects




                                       bree.gov.au
The Boom: Price & Volume Trends




                              bree.gov.au
Metal Prices: Past Trends




                            bree.gov.au
Commodity Prices: Past Trends & Projections




                                        bree.gov.au
Commodity Production: Past Trends




                              bree.gov.au
Commodity Production: Past Trends &
Projections




                                      bree.gov.au
Key Messages
• Overall commodity prices have peaked (2011)
  and likely to moderate over the next five years
  and beyond.
• Price reductions likely to be more substantial in
  period 2020 and beyond due to large supply
  responses from Australian competitors.
• Australian export values are projected to
  increase in medium term, but underpinned by
  higher volumes

                                              bree.gov.au
Major Mining Projects: Trends




                                bree.gov.au
Value of Advanced Mineral and Energy
projects ($2011-2012)




                                  bree.gov.au
Mining Capital Expenditure
• Capital expenditures in mining industry
  totalled about $50 billion in 2010-11 ─
  highest ever, 30% higher than in 2009-10
  and about three times greater than annual
  average over past 30 years.
• Based on industry intensions canvassed in
  December quarter 2011 expected to
  exceed $80 billion in 2011-12.

                                      bree.gov.au
Number of Advanced Mineral & Energy
Projects




                                 bree.gov.au
Completed Major Mining Projects ($2011-
12)




                                  bree.gov.au
Australian private minerals exploration
expenditure ($2011-12)




                                    bree.gov.au
Value of advanced projects by commodity
2002 v 2012




                                  bree.gov.au
Value of advanced projects by state
2002 v 2012




                                      bree.gov.au
Prospects: Value of Advanced Projects if
no new projects were announced




                                     bree.gov.au
Prospects: Number of Advanced Projects
if no new projects were announced




                                  bree.gov.au
Less advanced mineral and energy
projects




                                   bree.gov.au
Value of advanced and less advanced projects
Dec 2002 – April 2012




                                        bree.gov.au
Number of advanced and less advanced projects
Dec 2002 – April 2012




                                       bree.gov.au
Factors Affecting Investment
• Factors common to investment decision across
  the economy:
   – Macroeconomic conditions (interest rates, exchange
     rate, etc.)
   – Government policies

• Factors specific to the mining sector or
  commodity:
   – probability of discovering an economic mineral
     deposit or extending the resource base of a known
     deposit;
   – current and expected future prices;
   – mining and processing technologies; and
   – input costs                                    bree.gov.au
Key Messages
• Advanced projects, exploration expenditures and
  mining capital expenditure are at historic highs.
• High levels of investment (real $) will last for next
  few years given the time it will take for some very
  large projects to reach completion.
• Over the longer term high levels of investment
  unlikely to be maintained if resource commodity
  prices continue to moderate.


                                                bree.gov.au
         Thank You
quentin.grafton@bree.gov.a u




                       bree.gov.au

				
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