Dour mining report substantiates warnings of an Australian resource sector slowdown
A report indicating weak sentiment on the part of Australian mining companies would appear to substantiate warnings that Australia's flourishing resources sector is headed for a slowdown.
The Mining Business Outlook report released on Tuesday by Newport Consulting found that only a quarter of Australian mining firms have plans for investment in major projects for the next twelve months compared to 52% for 2011.
The report also reveals that over a third of mining industry figures were not optimistic compared to only 20% who were very optimistic.
Report author David Hand said to International Business Times that the abrupt change in the mood of the Australian resources sector is due to the widespread view that commodity prices will not remain high enough for future investment to generate sufficient returns.
The report's discomfiting news arrives only a week after Deloitte Access Economics warned that the Australian mining boom could only last for another two years.
The report also listed rising costs, price volatility and labour shortages as key factors contributing to weaker sentiment amongst Australian miners.
According to the Australian, however, the outlook for iron ore and coking coal remains positive compared to other mineral resources due to China's ongoing urbanization and augmenting steel production.