This is a benchmark comment for me.
The great Australian mining investment boom is about to be substantially curtailed. Government officials have been informed of the pending major curtailment, and why it is taking place, but there is nothing they can do about the dramatic fall in Australian productivity and the market change that have been the key causes.
Let me detail why it is happening, reveal some of the projects in the front line of curtailment plus those likely to proceed and finally make a first attempt of projecting what it means to the Australian economy.
Current mining investment is running in the vicinity of $40 billion to $45 billion a year – a more than five fold increase in a decade. In the next few years it is expected to at least double, making mining investment more than twice as large as the domestic housing market (according to Macquarie Equities).
The momentum of current projects being constructed will keep the numbers high for two or three years but then the rate of construction will fall sharply. Many projects will be shifted to Africa or other regions.
Business Spectator
Robert Gotliebson
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