Resources development spend jumps 21%

THERE is further evidence of the growing demand for commodities, with recent figures showing capital spending in Australia’s minerals and energy sector surging to a record $A132.9 billion, a 21% jump in the past six months.
Resources development spend jumps 21% Resources development spend jumps 21% Resources development spend jumps 21% Resources development spend jumps 21% Resources development spend jumps 21%

Rio's Brockman 4 project in the Pilbara

MiningNews.Net

The Australian Bureau of Agricultural and Resource Economics – Bureau of Rural Sciences said in a report that the $132.9 billion covered 72 advanced projects under construction or committed, of which 26 are energy projects, 25 are mineral projects, 15 are related infrastructure projects and 6 are mineral processing projects.

While the bulk of this is going towards energy projects, nearly 70% or $92.9 billion, iron ore projects also figure prominently, accounting for 13% or $16.9 billion of the total, while minerals and energy related infrastructure projects account for $11 billion or 8% of committed capital expenditure.

ABARE-BRS’s deputy executive director Paul Morris said the increase in planned capital spending reflected expectations of growing demand for mineral and energy commodities in the medium and long term.

“The record value of advanced minerals and energy projects reflects, in part, the decision to proceed with the development of BG Group’s Queensland Curtis Island LNG facility and Rio Tinto’s commitment to expand its iron ore export capacity by 60 million tonnes over the next three years,” Morris said.

On a state-by-state basis, Western Australia accounts for around 70% of the capital spending, including seven oil and gas projects (valued at $65.4 billion) and nine iron ore projects ($16.9 billion).

Queensland accounts for a further 21%, or $27.8 billion of capital spending, with over half relating to BG Group’s recently committed $15 billion LNG facility at Curtis Island.

The listing of 376 major development projects includes 304 projects at a less advanced stage, which are undergoing feasibility studies or approval processes.

New capital spending in the mining industry was $34.8 billion in 2009-2010, an 8% fall on 2008-09 figures. Based on industry intentions from the June quarter 2010, Australian Bureau of Statistics survey data indicates capital expenditure in the mining sector in 2010-11 may be around $54.8 billion.

In the past six months, 25 projects with a combined capital cost of $8.2 billion were completed in Australia.

loader