Ferguson backtracks over ‘mining boom is dead’ comment

Federal resources minister Martin Ferguson has taken a step back from his comments that the mining boom is over.

Speaking yesterday, Ferguson stated that "you've got to understand the resources boom is over.

"We've done well, $270 billion in investment, the envy of the world.

"But it has got tougher in the last six to twelve months."

His statements came on the back of BHP's announcement that it was mothballing its massive planned expansion of the Olympic Dam mine.

In a statement earlier this week BHP CEO Marius Kloppers said the company was looking for a cheaper alternative to expanding the project.

"As we finalised all the details of the project in the context of current market conditions, out strategy and capital management priorities, it became clear that the right decision for the company and its shareholders was to continue studies to develop a less capital intensive option to replace the underground mine at Olympic Dam," Kloppers said.

"We believe [this] decision reflects an appropriate, prudent and disciplined course of action."

Now Ferguson has clarified his resources statement, saying that the boom in commodity prices is over, but in terms of construction the resources industry is still moving ahead.

"Anyone with half a brain knows today’s record commodity prices are over," he said.

"The boom in commodity prices is over. No one can deny it.

"Just think about it, coking coal a short time ago was $320 a tonne, it’s now $220 a tonne; iron ore was $180 a tonne, it’s now $105; thermal coal was $220 a tonne, it’s now $80 a tonne. It was great for a short period of time, I think it will be a long time before we see those record commodity prices again."

However he stated that "the mining boom, in terms of construction, is not over". 

"It speaks for itself; $270 billion in committed capital investment. Gorgon is $43 billion alone, Gladstone is $55 billion, Icthys in Darwin is $34 billion, 12,000 jobs at Gladstone in the Hinterland, 4,000 on Barrow Island," he added.

His comments now echo those of Federal finance minister Penny Wong, who had earlier disagreed with him, stating that "I think the mining boom has got a long way to run".

Ferguson's statements follow the approval of GVK and Gina Rinehart's Alpha coal mine in Queensland.

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