By James Glynn
SYDNEY--Australia's mining boom is over as weakening global
economic conditions curtail spending, Resources Minister Martin
Ferguson said Thursday.
"You've got to understand, the resources boom is over. We've
done well -- A$270 billion (US$283.6 billion) in investment -- the
envy of the world. It has got tougher in the last six to 12
months," he said in an interview with ABC Radio.
"Look at Europe, the state of the European and global economy,"
Mr. Ferguson added.
The comments come after BHP Billiton Ltd. (BHP) announced
Wednesday it will postpone or scale back mining projects worth more
than US$50 billion. BHP said it won't proceed with the US$30
billion expansion of its uranium-copper Olympic Dam project in
South Australia, sending a strong signal that it believes the
mining investment surge has run its course.
BHP blamed rising costs, falling commodity prices and a high
Australian dollar for the decision not to expand Olympic Dam, which
followed a sharp drop in profits in the year to June 30, 2012.
Pressures have grown on the mining sector over recent months as
metal prices have fallen with iron ore, Australia's largest export,
falling to two-and-a-half year lows this week.
Job losses in mining are starting to mount, adding to concerns
about the outlook for investment, which has largely insulated
Australia against weakness in the global economy over recent
years.
Deutsche Bank said this week there is "dangerous complacency"
about the risk for the Australian economy given the slide in
commodity prices over recent months. It said the pace of decline is
consistent with a potential recession in 2013.
Write to James Glynn at james.glynn@wsj.com