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The value of investment in the resources industry is falling as major developments are completed.
The value of investment in the resources industry is falling as major developments are completed.
 










Investment value in Australian resources falls

The Federal Government’s commodities forecaster has reported that the value of investment in the resources industry is falling as major developments are completed.

The Bureau of Resources and Energy Economics (BREE) last week released its biannual Resources and Energy Major Projects report. According to the report, as of October, there were 63 mining and energy projects committed to by companies in Australia in October, worth a combined $240 billion. This was down from 73 projects six months earlier, worth a combined $268 billion.

“Australia is now seeing a transition from the investment phase of the resources boom to the production phase,” BREE deputy executive director Wayne Calder announced. “While the number of projects at the committed stage contracted, the six months to October 2013 saw 18 projects completed at a record $30 billion.”

BREE has concluded that the decline in investment value in the last six months is a result of a record period for projects moving to the completed stage. This is especially the case with “mega” infrastructure projects valued at over $5 billion such as Rio Tinto and Hancock Prospecting’s Cape Lambert port and rail extension, BHP Billiton’s Jimblebar mine and rail extension in the Pilbara region and Woodside Energy’s North Rankin B LNG project.

“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,” Calder added.

BREE’s forward projections indicate that investment in the resources and energy sectors is likely to decline in the medium term. There does remain an opportunity to sustain higher levels of investment should projects proceed through the investment pipeline at earlier stages of development.

The government forecaster first warned in May this year that investment in the resources sector might slide by more than two-thirds in the next five years after a fall in commodity prices prompted major mining groups to rein in their expansion plans.

To download BREE’s Resources and Energy Major Projects report, visit the BREE website.

Sources: BREE, Business Spectator, Mining Weekly










Hong Hui
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Friday, 20 September, 2019 10:16pm
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