(EnergyAsia, September 6 2012, Thursday) — Australia’s Prime Minister Julia Gillard is mocking those predicting the top of the mining boom by citing a well-worn Mark Twain quote in response to false rumours that he had died.
“Reports of the mining boom’s death have been exaggerated,” Ms Gillard told the 8th Australian Association of Mining and Exploration Companies (AMEC) conference in Perth earlier this week. Analysts have been falling over themselves proclaiming Australia’s long-running mining expansion had peaked amid falling demand from China and declining prices for coal and iron ore, two of its main export commodities.
Instead, the Prime Minister said this was a short-lived downturn as miners and their Asian customers are preparing a new round of capital investment. The recent decline in coal and other commodity prices is attracting buyers again even as miners continue to face the uncertainty posed by the economic recession in the US and Europe.
Referring to the industry’s “outstanding” capital expenditure figures, she said miners invested A$47 billion in 2010-11 and A$82 billion in 2011-12. (US$1=A$0.98).
“It’s set to hit A$119 billion by the end of this financial year (ending June 30 2013). That’s 13 times higher than before the mining boom, much of it from overseas,” she said.
Describing this as the Asian Century underpinning a long-term economic expansion, she said the boom is marked by three distinct phases. The commodity price boom is now passing amid the current investment boom still to reach its peak that will be followed by a production boom with decades to run.
“I talk of ‘decades’ because the Asian Century stands firmly behind the peaks and troughs of the business cycle. It’s a transformation on the scale of the Industrial Revolution,” she said.
“China is still only 50% through its process of urbanisation and industrialisation.
“JPMorgan chief China economist Haibin Zhu recently noted Chinese demand for Australia’s resources would slow but remain at a very high level over the next five to 10 years.
“Likewise, Rio Tinto CEO Tom Albanese said recently that Europe would contribute to a ‘soft demand period’ until early next year, while China’s industrialisation would drive healthy commodity prices for decades.
“India is yet to undertake the most dramatic stage of its rise. To say nothing of the development we expect to see in South-East Asia, South America and Africa over the next 50 years.
“It was famously said that Battle of Waterloo was won on the playing fields of Eton. It could be said that the race of the Asian Century will be won in the classrooms of Kent Street Senior High School down the road from here and its sister schools around the nation.
“Our 9,500 schools are the crucible where Australia’s economic future is being forged. That’s why I was so proud yesterday to launch the government’s National Plan for School Improvement.
“Nothing is more important to our future. Because schooling equals skills equals jobs. High skilled, high paying, high value-adding jobs.
And a mining conference is a great place to explain why higher school standards will make us winners in the Asian economic race.”