SURVEY: Skepticism Clouds Future of Australia's Mining Sector
Australia’s mining industry has been hit hard in recent years, riding a five-year low as disappointment and pessimism scours the sector.
According to industry executives and leaders surveyed in the latest Mining Business Outlook Report, 93 percent were not optimistic about their growth prospects for the next 12 months. The staggering proportion is up 50 percent compared to the previous year.
Plagued by tough market conditions, declining commodity prices and difficult regulatory environment, leaders in Australia’s mining sector believe the future is out of their control.
"We've got timid politicians who want to head off activists, NIMBYs, environmentalists across the country who, when you start talking about opening up a mine, get a lot of media coverage saying 'this is bad, this is evil, this is terrible',” says David Hand, managing director of report authors Newport Consulting.”
"Politicians have worked out there's no votes in opening a mine in 2014 so what they then do is placate their voters and the people they're concerned about, by saying 'we will make sure that the performance of this mine in terms of environment and safety and community involvement is as high as possible.
With confidence in Australia’s mining industry dwindling, 89 percent of leaders now say the country has lost its investment appeal.
Mining magnate Gina Rinehart said the high cost of doing business in Australia was driving some multinational companies to pursue overseas projects.
“Sadly, too many multinational companies, even Australian companies, are focusing and preferring to invest in overseas countries with lower costs,” said Rinehart.
“For instance, Rio Tinto, which has been in Australia for decades, and made most of its revenue from Australia, is now arranging multi-billions of dollars of investment for a major resource project with substantial infrastructure in Guinea in Africa.
“When that’s operating, it will bring billions of tons of ore on to the market to compete against Australia, and push down commodity prices. Too few seem to recognize the impact this will have when we are competing with lower-cost countries and how it will hurt Australia for decades.”
Mining Business Outlook Report surveyed over 60 executives of private and publicly listed mining companies.
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