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