(Bloomberg) — Mining companies in Australia, the world’s biggest exporter of iron ore and coal, are poised to approve fresh investments in projects, driven by rallying commodity prices and the need to replace depleting deposits, according to global equipment supply giant Komatsu Ltd.
“They’re looking at new fleets of equipment,“ Sean Taylor, chief executive officer of Komatsu’s Australian unit, said in an interview in Sydney. The miners have to reinvest in output “because otherwise they can’t maintain production at the levels that they’re at,” he said.
Australia’s commodity exports are set to hold above A$200 billion ($155 billion) over the next two fiscal years and there’s a pipeline of about A$25 billion of projects approved for construction, according to government estimates. The Bloomberg Commodity Index has advanced more than 12 percent since slumping to a quarter-century low in January 2016.
“The level of the commodity prices is pretty good now for the miners to consider reinvestment,” Taylor said in the June 29 interview. “It feels like to me we’ve got more discussion around decision making.”
Conversation about greenfield sites, which can take up to 10 years to be approved, have “certainly increased a little bit in the last six months — whereas before that, it was zero,” he said.
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