LAUNCESTON - There is a creeping realisation inside Australia that the nation's commodities boom is becoming harder work, with project costs blowing out and questions over whether there will be enough demand from Asia.
Australia's economic success of the past decade and its hopes for future wealth are built on the appetite of Asia, and China in particular, for iron ore, liquefied natural gas, coal and other commodities.
But recently the rosy outlook for commodities, that has led to a pipeline of about A$300-billion ($295-billion) in mining and LNG projects, has dimmed amid cost pressures, delays, environmental opposition and changes in government policy that have raised risks and lowered potential returns.
There is also growing concern about the crowding-out effect resources are having on other sectors of the economy, most notably manufacturing and tourism.
While it's too early to suggest that Australia is going to trim back its planned investment in resources, the mood appears to be shifting towards reassessing projects and there may be consolidations or delays in final approvals.
This could have serious economic consequences, as while resources and related services are about a fifth of the economy, they have been the main driver of gross domestic product growth in the past decade.
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Mining Weekly
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