It all started in the year 2000 when Asian economies, particularly China, started recording quick and high expansion. There was a massive demand for the raw material from these markets. At this point, Australia was discovering their mines and iron ore and coal, which in high demand in China, was in plenty. At this point, the country was strategically positioned to supply the much need raw material. At this point, the prices started rising tremendously, and most companies started investing in the resources industry. The results were seen immediately, and by the year 2003, the sector was already raking in billions in terms of export. That’s when the mining term “Aussie mining boom” surfaced due to the incredible profits records by investors involved directly or indirectly in mining.
Is the Australian Mining Boom Really Over
But just like the GOLD rush the late 19th century, this was not to last for long. A decade down the line, it seems to be taking a nose dive. The iron ore and coal prices started going down, and most of the prospective investors start cutting the rate of investments, and this has significantly affected the entire economy. The most hit are the regions such as Pilbara and Karratha amongst other areas whose economies relied on the mining boom. They recorded a growth in Perth property development prices due to mining activities. Some of the places such as Karratha are already recording a 65 per cent fall in property prices.
But is it the end of the Aussie mining boom? This is the question most people including experts are asking themselves. Amid all the negative speculations, Reserve Bank of Australia (RBA) thinks that people are being too negative about this sector. According to Ian Harper, an RDA board member, the drop could be temporary for a few years or decades, but the market has a way of pulling off surprises. He noted that the current export phase of the mining boom still counts for the 10 per cent of all jobs. He also noted that it will be running for the next 30 years though this will not be the boom we had experienced before.
Phases of Resource Booms
According to Mr Harper, the resource booms come in three phases- the prices, investment and expert or production phases. According to the RBA, the industry is now in the last phase (export or production). According to him, this phase will probably last for the next 30 years, and it’s still large to keep the economy strong. But what is clear is that the boom may never come again in the near future. It’s up to the region that relied and benefited on the mining to adjust to mitigate disruption of their economies.