Record Mining Investment set to continue

Mining investment is up 74 percent since last year, and 34 percent in the last six months.

Last week the Bureau of Resources and Energy Economics (BREE) published their biannual report on Mining Industry Major Projects – showing the silver (or is that gold?) lining in the face of economic doom and gloom.

At the end of October there were 102 projects at an advanced stage of development with a record high capital expenditure of $231.8 billion.

So can we expect more for 2012? Put simply – yes. Investment is set to continue with 302 less advanced projects registering a potential capital expenditure of $224.3 billion.

BREE’s Chief Economist said "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."
Of the 102 advanced projects 40 are Mineral Projects representing capital expenditure of $30.7. billion Major iron ore projects include: CITIC Pacific’s US$6.1 billion Sino Iron Project; BHP Billiton's US$3.4 billion Jimblebar mine and Fortescue Metals Solomon Hub Stage 1 having an iron ore capacity of 60 million tonnes a year at a capital cost of US$2.7 billion. The largest advanced gold project is Newcrest’s Cadia East development in New South Wales, which is scheduled for completion in 2013 with a capital cost of $1.9 billion.

37 Energy Projects with capital expenditure of $170 billion. The Gorgon LNG project is the largest single resource project undertaken in Australia with an estimated capital expenditure of $43 billion.

21 Infrastructure Projects with a capital expenditure of $25 billion. The largest of these is Wiggins Island Coal Terminal which is located in Gladstone at an expected to cost around $2.5 billion to construct.

4 Mineral Processing Plants with a capital expenditure of $6.4 billion. The two largest mineral processing projects are both alumina refineries. The Worsley Refinery Efficiency and Growth project in Western Australia, scheduled for completion in 2012 for an estimated capital cost of US$3.5 billion. Expansion of the Yarwun refinery in Queensland at an expected capital cost of US$2.3 billion.

In 2010-11, New Capital Expenditure increased by 28 per cent to $51 billion, an all time record around three times the average annual expenditure over the past 30 years ($17.1 billion).

In 2010-11 Exploration Expenditure increased 9 per cent to $6.2 billion from 2009-10, the second highest level on record. Nearly all sectors increased their exploration with Coal increasing by 62 per cent; Copper 60 per cent; Base Metals 46 per cent; Uranium 26 per cent; Iron Ore 27 per cent; and Gold 13 per cent. Petroleum was the only major sector to slide decreasing by 8 per cent.

The accumulated capital expenditure of Completed Projects in the last six months totalled $9.6 billon. The largest energy project was the Cossack Wanaea Lambert Hermes field redevelopment and floating production, storage and offtake vessel located at the North West Shelf in the Carnarvon Basin, Western Australia, completed at a cost of US$1.47 billion and has the capacity to produce up to 60,000 barrels a day of oil. The Kitan oil project at a capital cost of US$600 million has an oil production capacity of 35 000 barrels a day.

What a great time to be a part of such a vibrant and prosperous industry

For a full copy of the report go to:
http://www.bree.gov.au/documents/publications/resources/BREE_MEMP_NOV2011.pdf