There is no end on sight to the mining boom in Australia, a country which mineral resources sector value is expected to reach $122.6 billion by 2016, growing at an annual average rate of 4.3%, reveals a study published Saturday.
Analysts from the US-based business research company, Fast Market Research, say Australia’s substantial deposits of iron ore, nickel, copper, gold, silver, uranium, diamonds, zinc, coal and bauxite, will keep driving the country’s output growth. Last year, the value of Australia’s mining sector reached $99.6 billion.
Iron ore will continue to be the star, showing the greatest output increase to reach 758 million tonnes by 2016, up from 488 million tonnes in 2011. The commodity average annual growth is expected to be 9.2%.
As iron ore accounts for the largest proportion of Australia’s mining sector's value by output, between 30% and 40%, this increase will have a significant bearing on the country's mining sector value, says the report.
“The growth will be driven by BHP and Rio Tinto, as the former expects to increase output from 164 million tonnes to 220 million tonnes a year in 2014 at its operations in Western Australia, while the latter is increasing production from 156 million tonnes to 283 million tonnes at its Pilbara operations in 2015,” it says.
The firm expects Australia to remain the world's largest bauxite producer with output growth averaging 6.3% a year, reaching 94.8 million tonnes in 2016, from 70 million tonnes in 2011.
The vast majority of this growth, says the report, will be driven by Rio Tinto's expansion plans for its Weipa mine, the world's largest bauxite operation. Weipa is expected to see production rise from 18million tonnes a year to 50million tonnes per annum next year.
Data published on Monday by CommSec confirm the positive outlook. According to that study, Australia’s flourishing mining industry has generated unprecedented prosperity across the country's west and north. And his main author, economist Craig James, said he believes it is just the beginning:
"It is the modern day equivalent of the gold rush but it has the potential to last a whole lot longer," he said.
"It is not like a gold boom, where the price accelerates and then falls in a heap. China's industrialization is the biggest the world has ever seen. People in China are only just getting cars and washing machines and so on. The price of minerals may drop but the demand for them will be ongoing."
CommSec's data shows that miners working on remote gas and oil rigs can earn nearly $235,000 a year, while cooks, drivers and supervisors can make over $100,000.
The highest-earning towns in the country, remote and until now almost unknown, are Cane, Onslow and Peedamulla in Western Australia. In these remote towns mining workers have been earning more than triple their colleagues in the rest of Australia, where average personal incomes are about $32,000 and standard household incomes are about $66,000.
However, Deloitte Access Economics said Sunday Australia's mining investment boom will slow sharply than expected in two years, reported The Sydney Morning Herald:
Mining companies are making it clear the current spike in investment is due to decisions taken a while back, whereas we are getting few new mining mega-projects across the line.
Deloitte Access Economics is Australia's main private-sector budget forecaster.