Commodities “supercycle” ending

Australia’s mining sector is witnessing a sharp rise in the number of projects suffering being put on the backburner, cost blowouts, and the slashing of exploration budgets.

The Bureau of Resources and Energy Economics has joined the Reserve Bank and a number of the country’s top analysts including investment bank Citi, declaring investment has peaked in the sector and 2013 would mark the end of the ''commodities supercycle''.

''This year should provide full affirmation that the commodity supercycle has finally ended and should usher in the first 'normal' year in over a decade in which, broadly, commodity prices end the year lower than when the year started,'' Citi analysts said.

According to BREE’s report on major projects, it is estimated in the last 12 months Australia has missed out on $149 billion of resources projects spending, with 18 projects being either deferred or cancelled.

Some of the largest project cancellations last year include:

1) Woodside’s Browse LNG hub $40 billion

2) BHP Billiton’s Olympic Dam expansion $20 billion

3) Woodside Petroleum Puto 2 LNG project $10 billion

4) Mitsubishi Development Oakajee project $6.3 billion 

5) Hydro Aluminium Kurri Kurri aluminium smelter expansion $4 billionImage: Fairfax Media

6) China Metallurgical Group Cape Lambert Iron Ore project $3.7 billion

7) Jupiter Mines Mount Ida magnetite project $1.6 billion 

8) Sinosteel Midwest Corporation Weld Range haematite project $1 billion 

9) BHP Billiton Rail network from Goonyella Riverside to Abbot Point $1 billionImage: source

10) BHP Billiton Port Hedland outer-harbour expansion $1 billion 

11) Tarong Energy Kunioon coal mine expansion $1 billion Image: Six Degrees

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