Mining industry about to peak says Deloitte

IT HAS been an incredible journey, but the amount of money being funnelled into building the mining industry is about to peak - marking the start of the first descent in at least five years.

The latest Deloitte Access Economics report, released today, suggests with the price for minerals having fallen so far, "the first phase of the mining boom was over".

But until the industry hits its funding summit, the astounding number of dollars spent on building would continue to increase until 2014 when the flow began to weaken as fewer projects were pushed through the development pipeline.

Of the $461.billion worth of projects confirmed or under construction in Australia, $243.billion were in the mining industry.

Western Australia and Queensland were giving Australia its most valuable projects, accounting for 51% of developments while New South Wales and Victoria contributed just 17%.

According to the report, Australia's mining boom was a three-legged beast held up by commodity prices, construction and export volumes.

The report found prices were unlikely to again hit the dizzying heights reached in 2011.

However, China's stimulus spending was helping them return to a reasonable level after a prolonged slump.

Export figures were also rising as companies sold more coal at a lower price to even out the losses.

Construction rates - the final leg - would begin to fall eventually but as Deloitte Access Economics said, "this nation never could have managed to do all these projects at once anyway".

The report said this was a "silver lining".

"The more careful miners here and around the world are with their capital, then the slower mineral supply will grow in coming years.

"And, other things being equal, that means the higher commodity prices will be.

"So slower mining development will have some offset over time, by keeping commodity prices higher than they might otherwise have been.

"This is indeed a case where 'less is more'."

Topics:  deloitte economy mining boom mining industry

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