Issue link: https://viewer.e-digitaleditions.com/i/103334
Prophet of BOOM Jack Cleaver takes a look at the year that was in Australian mining and what the future may hold for 2013. Australia's mining industry has recently had a fantastic run thanks to ongoing demand for base commodities from our key trading partners. So, the primary question for our resources sector is: Where is China going? It stands to reason that the eight per cent annual compound growth over the past decade cannot be sustained in China for very much longer unless there is a dramatic shift towards greater domestic consumption, rather than the economy being fed by exports and an undervalued pegged currency. Easing concerns about China is JPMorgan chief China economist Haibin Zhu, who visited Sydney last August and was quoted as saying that China's demand for Australia's resources would slow but remain at a very high level over the next five to 10 years. "What follows the recent boom is going to be far from a bust," he said, pointing out the Chinese government was intent on maintaining the country's growth at a lower but more stable level. With such reassurance bolstered by similar sentiments from other sources, we can confidently predict that our future remains steady, if not as spectacular as the past few years. In terms of our past, we had a cracker of a year in 2012, when the development of our mining infrastructure peaked. 2012 wrap-up We might have reached the peak in prices, but volumes throughout 2012 were still increasing and there were still plenty of projects. Federal Treasurer Wayne Swan said the mining boom was "better understood as a series of booms – a boom in prices, a boom in investment and a boom in exports". That basically described 2012. The Treasurer said, "While the price boom has passed its peak, the investment boom still has some way to run." The Bureau of Resources and Energy Economics forecast commodity export earnings will reach a record $209 billion in financial year 2012/13 as higher volumes "We can confidently predict that our future remains steady, if not as spectacular as the past few years."