Mining Capex Dwindling
by Marc Lerner
In the past few months, there have been several indicators of the falling amount of capital expenditure in the mining sector in Australia, the best of which is the ANZ major projects update, which forecasts reductions in the potential project pipeline of about $115 billion compared to ANZ’s previous forecast in July 2012 for total major projects in the country, a large part of the fall being attributable to mining and energy project delays or cancellations. There have also been several secondary indicators of the slowdown of the sector – two examples being poor results from mining equipment manufacturers such as Caterpillar and earnings guidance reductions and job cuts at the mining consultancy firm Coffey.
All of this, of course, only charts the supply response of the Australian mining industry to weaker commodity prices so far. What might happen to demand from China, and hence these prices going forward, is a whole other issue.