Australian resource projects worth $268.4 billion

A report released by the Bureau of Resources and Energy Economics said investment activity in the mining sector will continue with $268.4 billion already committed to major projects.

The Resources and Energy Major Projects October 2012 report details 87 major projects which have achieved investment committment already, and highlighted a further 277 projects in the planning stages.

The 87 projects are made up of 51 minerals projects, 18 gas and petroleum projects and 18 infrastructure projects, and include 11 'mega projects' which cost more than $5 billion each.

The Minister for Resources and Energy, Martin Ferguson welcomed the strong level of investment the report details and said the figure was up three per cent from the previous release in April 2012.

"To put Australia's investment in oil and gas in perspective, the total committed expenditure on these projects is comparable to the cost of the Apollo Moon Program in today's prices," he said.

"Just in the six months to October 2012, we've had 10 projects worth $13.2 billion committed, including the expansion of the Australia Pacific liquefied natural gas plant under construction in Gladstone, Queensland.

"Although we have seen commodity prices cycle down recently, this report shows that we have a solid pipeline of potential investment in resources and energy.”

However Ferguson added that Australia could not afford to become complacent about investment opportunities.

"Even with such a pipeline of investment there is no doubt that we are entering a challenging phase,” he said.

"In the face of lower commodity prices, the delivery of this pipeline of projects is contingent on keeping production costs down, providing access to skilled labour and increasing our productivity and efficiency.

"The Australia Government is working with the resources industry to ensure Australia remains competitive, and continues to attract investment in one of our most valuable sectors."

Ensuring Australia stays competitive on the global market has been a hot topic in the resources industry recently, with several high-profile players stating the need for policy reform was urgent.

At her book launch last week, Gina Rinehart warned Australia risked becoming another "Greece, Spain or Portugal" unless it cuts government debt and lifts its competitiveness.

"One of the things that I'm really concerned about is the cost competitiveness of our industry because our industry doesn't sell on the local market, it sells on the world market," she said.

Rinehart says that making Australia an attractive investment destination was critical, adding it is an issue of which “too few Australians are realising the consequences".

Australian Mining asked Rinehart which policies she thought needed the most attention.

“There’s two in particular,” she answered.

“That is new and increasing taxes such as MRRT, such as carbon tax and then there’s also the cost of regulations.”

Speaking at the NSW Minerals Council Industry Conference professor Henry Ergas from the University of Wollongong also highlighted the challenges facing the mining industry and said serious reform is needed to ensure Australia remains globally competitive.

“If we continue to face rapid cost escalation then we could rapidly lose market share and even lose volume,” he warned.

Pointing to policy reform around planning and the environment, industrial relations and tax reform, Ergas argued that if restrictive policies were not amended it would mean to ‘forego significant net benefits moving forward.'

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