The Australian mining industry is estimated to have diminished by almost 5% in real terms in 2008
Forecasts for Australia’s mining industry are discouraging, with the industry estimated to have contracted by almost 5% in real terms in 2008. Meanwhile, we forecast an average annual reduction of almost 2% in real terms for the remainder of the forecast period.
The main reason for this disappointing outlook is the global slump in commodity prices. However, Australia has also been particularly hard hit by restructuring at the world’s largest miners, BHP Billiton and Rio Tinto. By 2013, the report forecasts that Australia’s mining industry will represent only 3.08% of GDP, compared with 4.26% in 2007
Australian mining is currently dominated by China’s increased buying activity across the sector. As 1st July 09, the government was considering Chinalco’s US$19.5bn bid to increase its stake in Rio Tinto, alongside China Minmetals Corporation’s AUD2.6bn bid for OZ Minerals and Hunan Valin Iron & Steel Group’s AUD1.2bn for a 16.5% stake in Fortescue Metals Group.
Mixed messages from Swan In the first major mining investment decisions to be taken by the Labor government since taking office in late 2007, Treasurer Wayne Swan has said ‘yes’ to Hunan Valin Iron & Steel Group’s AUD1.2bn bid for a 17% stake in Fortescue Metals, but ‘no’ to China Minmetals Corporation’s AUD2.6bn bid for OZ Minerals. Treasurer Swan vetoed the China Minmetals bid for OZ Minerals on national defence grounds, saying that it could not include OZ Minerals’ key Prominent Hill copper and gold mine as part of the deal. This is because the Prominent Hill mine lies in the Woomera Prohibited Area weapons testing range.
Consequently, China Minmetals made a revised offer of US$1.69mn for Oz Minerals assets (excluding Prominent Hill), which is now widely accepted to be approved by mid-year.
In the case of specific mineral exploitation, the authorities now consider uranium mining proposals on a case-by-case basis.
Categories: GENERAL News