By Robb M. Stewart
MELBOURNE, Australia--The amount of money invested in
Australia's resources industry continued to fall as large projects
were completed and mining companies scaled back their spending.
Money committed by mining and energy companies such as BHP
Billiton Ltd. and Rio Tinto PLC to start or expand projects fell to
229 billion Australian dollars ($212.1 billion) at the end of April
from A$268 billion a year earlier, the government's Bureau of
Resources and Energy Economics said Wednesday. At the end of
October, the figure was A$240 billion.
The amount invested in projects dwindled over the six months to
April, mainly because more than A$25 billion in minerals-and-energy
developments were completed, BREE said. Fewer new projects have
filled that void.
The transition to an output phase is likely to support growing
exports of coal, iron ore and other commodities, which
resource-rich Australia ships to China, Japan and elsewhere. But it
may also weigh on prices as increasing supplies of those
commodities enter the global market.
Within BREE's latest six-month time frame, Australian resources
companies approved the construction of eight new projects at a
combined value of A$12.8 billion. A year earlier, 21 projects were
approved worth more than double that amount, the bureau said.
A mining boom has seen resources investment in Australia jump
over the past several years, boosting the value of projects under
construction by close to 10 times in the past decade. That trend
has seen capital spending in the mining industry grow to 60% of
total annual private-sector capital expenditure from about 20%.
The explosive growth of investment in the resources industry has
helped cement the country's position as the world's largest
exporter of iron ore, and a major producer of other commodities
including coal and natural gas.
However, mining companies more recently have sharply trimmed
their spending, shelved some expansion projects, and closed down
older or poorer-performing mines.
"While the investment cycle has peaked, Australia is now moving
into a period of significant increases in the production of
resources and energy commodities," said Wayne Calder, deputy
executive director of the government bureau.
Mr. Calder said that in the past year alone, the production
capacity of iron ore had grown by 215 million metric tons, while
for coal the figure was around 43 million tons. At the same time,
more than 1,100 petajoules of natural-gas production capacity has
been added.
Write to Robb M. Stewart at robb.stewart@wsj.com
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