The real dirt on the minerals super-cycle
History alone will tell us if the glass is half full or half drunk.
Minerals super-cycle going strong by Nigel Wilson
AUSTRALIA is in a super-cycle for mineral commodities which could last for several more years until international supply catches up with demand.
The chief executive of the Minerals Council of Australia, Mitch Hooke, made the prediction in releasing the 30th annual minerals industry survey in Canberra yesterday.
The strong results reported in the survey put a question mark over the claim by federal Treasurer Peter Costello last month that the minerals boom was coming to an end. The survey showed the net profits of Australia's mining companies jumped 74 per cent in 2006 to $11.8 billion, the highest level since records began nearly 30 years ago.
Mr Hooke told The Australian the minerals sector was probably in the first two years of a super-cycle and there was no reason to expect a slowdown anytime soon.
"What will determine the future is when supply catches up with demand," he said.
"The past year, or so, has seen the result of investment in infrastructure, iron ore and coal, which is reflected in greater shipments.
"There is further investment in the pipeline, which is encouraging after years where infrastructure spending has lagged behind what was required.
"Supply capacity constraints have been the key economic problem in preventing Australia fully benefiting from the strongest global market growth in a generation. Capacity constraints to growth continue to frustrate the industry's expansion - specifically in human resources and skills shortages, transport and infrastructure, minerals exploration and inconsistent regulation, government project approvals and occupational health and safety."
The MCA executive said he was confident that even if demand from China eased, the resurgent Japanese economy would continue to provide a market for Australian minerals producers because Japan was dedicated to supply security.
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