Australian resource minister declares mining boom over, then backtracks
Less than 24 hours after Australia's minister for resources and energy declared that the country's mining boom had come to an end, he appeared saying he was misinterpreted, and that the resources industry is still moving ahead.
Martin Ferguson made the burning statement on Thursday in the wake of BHP Biliton's (ASX:BHP) decision to mothball AUD30 billion in expansion plans. He told ABC Radio that BHP's decision signalled the end of the Australian mining sector's halcyon era and that 'the resources boom is over.'
Ferguson also observed that the environment for investment in the mining industry had worsened considerably over the past six to twelve months as 'the days of record commodity prices are gone.'
On Friday, he clarified his resources statement, saying that the boom he was referring to was the one in commodity prices, not in the industry as a whole.
"Anyone with half a brain knows today’s record commodity prices are over," he said according to Mining Australia.
"The mining boom, in terms of construction, is not over […] It speaks for itself; $270 billion in committed capital investment. Gorgon is $43 billion alone, Gladstone is $55 billion, Icthys in Darwin is $34 billion, 12,000 jobs at Gladstone in the Hinterland, 4,000 on Barrow Island," he added.
BHP Biliton announced the day previously that it will not approve the Olympic Dam open-pit expansion in order to 'substantially improve the economics of the project.' BHP Biliton CEO Marius Klopper stated that weak commodity prices and increased capital costs were behind the decision.
Opposition leader Tony Abbot made haste to seize upon Ferguson's remarks, compelling Prime Minister Julia Gillard to come out and qualify Ferguson statements by saying that they pertained more to commodity prices and that investment in Australia's mining sector remains strong.
Ferguson's cabinet colleague Penny Wong also openly contradicted the resources and energy minister by saying that 'the mining boom has got a long way to run.'
Image from Youtube courtesy of ABC News