Kauri
E/W Learner
- Joined
- 3 September 2005
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Todays West Australian...........
Mine plans at risk: report
27th January 2007, 12:00 WST
Leading research group BIS Shrapnel has warned that a forecast slump in mining investment could threaten flagship WA iron ore and nickel projects now slated for development.
The soon-to-be-released BIS Shrapnel Engineering Construction in Australia report predicts the WA economy will retract sharply over the next three years as the heat goes out of mining investment, although it expects the burgeoning pipeline of LNG projects to soften the blow.
“It is likely that a lot of projects will still go ahead this year with prices falling, but once you get into 2008-09 a lot of those projects, which looked pretty likely to go ahead, will probably get shelved,” BIS Shrapnel senior economist Richard Robinson said.
“The work that has started on those projects will continue so you won’t see a big downturn probably until the 2008-2009 financial year and I think that is when you will get the big effects on the WA economy.
“One of the big differences between the downturn in this mining investment cycle and the downturn in the late 1990s, which really affected the WA economy, is the LNG plants. That is one of the things that will stop the dramatic slide.”
Defying the assurances of resource bulls, Mr Robinson said China’s red-hot investment growth was unsustainable and would begin to tail off in coming years, reducing demand for commodities and dragging prices lower.
He said the big ticket nickel developments and Mid-West iron ore producers who were planning to run exports out through Geraldton or the new port at Oakajee were the most likely to be hurt by the lower prices and the ensuing slump in resource sector investment.
“Because they have to build a rail line, a new port and even though they reckon they have Chinese backing, the Chinese will back-pedal and they have done that in the past if things don’t stack up,” he said.
Gindalbie Metals, MidWest Corporation and Murchison all have iron ore projects slated for the Mid-West while Consolidated Minerals, Lion-Ore Mining and Western Areas are planning new nickel mines. ...........
TRACEY COOK
Mine plans at risk: report
27th January 2007, 12:00 WST
Leading research group BIS Shrapnel has warned that a forecast slump in mining investment could threaten flagship WA iron ore and nickel projects now slated for development.
The soon-to-be-released BIS Shrapnel Engineering Construction in Australia report predicts the WA economy will retract sharply over the next three years as the heat goes out of mining investment, although it expects the burgeoning pipeline of LNG projects to soften the blow.
“It is likely that a lot of projects will still go ahead this year with prices falling, but once you get into 2008-09 a lot of those projects, which looked pretty likely to go ahead, will probably get shelved,” BIS Shrapnel senior economist Richard Robinson said.
“The work that has started on those projects will continue so you won’t see a big downturn probably until the 2008-2009 financial year and I think that is when you will get the big effects on the WA economy.
“One of the big differences between the downturn in this mining investment cycle and the downturn in the late 1990s, which really affected the WA economy, is the LNG plants. That is one of the things that will stop the dramatic slide.”
Defying the assurances of resource bulls, Mr Robinson said China’s red-hot investment growth was unsustainable and would begin to tail off in coming years, reducing demand for commodities and dragging prices lower.
He said the big ticket nickel developments and Mid-West iron ore producers who were planning to run exports out through Geraldton or the new port at Oakajee were the most likely to be hurt by the lower prices and the ensuing slump in resource sector investment.
“Because they have to build a rail line, a new port and even though they reckon they have Chinese backing, the Chinese will back-pedal and they have done that in the past if things don’t stack up,” he said.
Gindalbie Metals, MidWest Corporation and Murchison all have iron ore projects slated for the Mid-West while Consolidated Minerals, Lion-Ore Mining and Western Areas are planning new nickel mines. ...........
TRACEY COOK
