A NUMBER of major mining projects and others presently on the drawing board may well drive an resource investment boom in WA during 2001-02.
According to the Challenge Bank’s Market Insight, the West Angelas iron ore mine, several gas projects in the North West and possible expansion of new laterite nickel mines all have the potential to boost the economy.
“The risk, however, is that Australian miners are now super-competitive and many once marginal projects look very profitable due to the sharp fall in the value of the Australian dollar and higher world commodity prices,” it said.
“A recovery in the AUD back to long-run trends in the medium term, along with a likely easing in global growth, could see many producers saddled with excess capacity.”
The biggest growth indicator for the mining sector is in exports.
The report said that WA was experiencing an export boom, with shipments of goods growing at more than 50 per cent annually.
Much of the current increase is price-related, reflecting the favourable combination of high world commodity prices and a low AUD, with goods export volumes running at a lower, though still very respectable, 20 per cent plus annual rate.
Exports are also riding high on the back of Asia’s economic recovery and the commencement of the ramp-up phase in a number of newly commissioned nickel projects.
A softer global economy next year could take the edge off WA’s exceptional export performance, though above-trend outcomes are still expected.