Mining Boom far from over in Queensland
The Queensland resources boom is not about to end despite BHP Billiton's decision to defer tens of billions of dollars of Australian mining investment, most of it in other states.
The world's biggest miner might be postponing expansion of its Peak Downs coalmine in central Queensland as part of a broader strategy to wind back new project development but it and many other global and local and global resource companies are still pressing on with multibillion-dollar investments in Queensland, from new coal mines to massive new LNG projects.
It is logical to expect such long-term players as BHP Billiton, which has just announced an annual profit of $15.4 billion, to periodically rethink the pace of their expansions in the light of changing market conditions, which include lower coal prices and higher operating costs.
In South Australia BHP Billiton has not shelved its Olympic Dam expansion in
It is worth noting, however, that while prices might be softening they are retreating from historic highs and are still strong enough to attract the interest of new industry participants, particularly from
Indeed just yesterday, the Federal Government announced environmental approval for the $6.9 billion Alpha coal mine and rail project in the Galilee Basin being developed by Gina Rinehart and India's GVK.
In his regular six-monthly appearance in front of the House of Representatives economic committee on Friday, RBA Governor Glen Stevens said he exapected the peak in Australia's's resources investment boom to occur in the next year or two when export shipments will pick-up.
"Looking ahead, the peak of the resource investment boom as share of GDP - the highest such peak in at least a century - will occur within the next year or two," he said.
"After that the rate of resource investment is likely to decline, while the export shipments of the resources themselves will pick up."
He said by then the RBA might expect some other sectors that have been weak of late, like residential and non-residential construction, might be starting to pick up.
"Overall, growth is forecast still to be close to trend, albeit with a different composition from that seen in the past year or two, and inflation consistent with the target," he said.
He said the Chinese economy looks like it has slowed to a pace of growth that is likely to be more sustainable, although this is below the pace seen for much of the recent past.
"Commodity prices have declined.
He said developments in key commodity prices overall do not seem out of line with the progress of the global economy.