Brendan Pearson is chief executive of the Minerals Council of Australia.
One of the questions posed most frequently by politicians and economists in recent years has been the following: “What comes after the mining investment boom?” New official commodity forecasts released on Monday provide a simple answer – a much bigger mining industry.
The forecasts, by the Industry Department’s Office of Chief Economist, revised up resources exports for 2016-17 to $205 billion. That’s an upward revision of nearly $40 billion since March 2016. Just the incremental increase in expected earnings is bigger than annual receipts from tourism.
The result surely dispels the proposition that the mining investment boom was a simple one-off event that left no enduring legacy and therefore needed to be “replaced” by something else.
That analysis overlooked the threefold increase in the capital stock of the mining industry during the last decade or so. In the last three years alone export volumes continued to accelerate helping to maintain national export income even as prices fell sharply.
Big bounce for states
With the recent bounce in commodity prices we are again seeing the dividend of the investment made over the last decade. State treasuries are seeing the practical effect of this in their royalty receipts. The Queensland government expects to receive $1.4 billion more than expected in the 12 months to June, while Western Australia will reap nearly an extra $1.35 billion.
For the rest of this opinion column, click here: http://www.afr.com/business/mining/stories-of-australias-mining-decline-were-greatly-exaggerated-20170108-gtnywt