Record investments in Australian mining sector show significant growth
Investment in Australia's resource sector hit a new record high at the end of October. There were more than 102 projects in the country at an advanced stage as well as a record capital injections of AUS $231.8 billion during the month, Mining Weekly reported.
This investment signaled a move by many companies to capitalize on the commodity prices trends, as minerals have been increasing in value over the past year. A 74 percent year-on-year rise in capital injections was recorded by the Bureau of Resources and Energy Economics (BREE), according to the news source.
Although the world economy may not favor an expansion within the industrial sector, where many of the metals are used, an increase in value may still occur.
"Significant growth in coal, iron ore and gas exports are expected to occur over the medium and long term, underpinned by the capital investment that is occurring in these sectors," Quentin Grafton, a professor and executive at BREE, told The Canberra Times.
The positive exploration trends on the continent have led officials from the government to note that taxes have not hurt revenue streams or motivation from any companies in the country.
"The figures released today are further evidence that the Government's resource taxation reforms are the right policy, at the right time, and are not posing an impediment to continued record investment in our resources sector," Resources Minister Martin Ferguson told the Times.
Ferguson went on to note that the value of the advanced research projects in the country was more than 16 times what it was only a decade ago, as the number has risen sharply from just over $14 billion, according to the news source.
Mining Weekly reported that while exploration projects for a basket of commodities has risen by a significant margin over the last decade, and since the end of 2010, copper has seen the largest increase.
Copper exploration is projected to have increased by 60 percent from 2009/2010 to the end of the 2011 mining season, according to the news source. This rise in interest may have been motivated by the prices that the metal is fetching in global markets.
This trend is not set to change in the near future, according to TD Securities strategist Annette Beacher.
"A report from the Australian Treasury estimates that $430 billion of private business investment is on the cards and already underway, hence we cannot rule out a similar magnitude for the next two to three years at least," Beacher told the Times.