Research consultants Wood Mackenzie have predicted that investment across Australia’s resource sector will be at record levels over the next three years.
The Edinburgh-based firm expects resource sector investments to peak in 2013 at $85 billion, dominated by spending in gas, followed by iron ore and coal.
"The high investment levels will be sustained over the next three years, surpassing the previous three year period," the firm said.
The gas industry is set to be the biggest winner receiving an ‘unprecedented’ $48 billion in investment this years.
This is followed by a record high $22 billion investment in iron ore and an $8.5 billion investment in coal.
Regionally, Western Australia and Queensland dominate, making up 83 per cent of total capital expenditure in 2013, driven by large LNG and iron ore projects.
According to Wood Mackenzie, a large part of the drive in WA will come from investments in iron ore projects, which are set to push investment in the state's resources sector to record levels.
Wood Mackenzie’s head of Global Metals and Mining Supply Research, Gero Farruggio, said that investment in iron ore would reach a peak in 2013 as infrastructure construction and mine expansions were completed by the majors, and Chinese steel production growth moderated.
Mr Farruggio also predicted iron ore projects in WA would increase Australia’s global seaborne trade dominance, “taking its share of global seaborne (iron ore) trade to over 50 per cent by 2016, as major Pilbara-based mine and infrastructure investments come to fruition".
Wood Mackenzie’s head of Australasia Upstream research, Chris Graham, said the outlook for the next three years confirmed the strength of the Australian resources sector, with investments being made based on decisions taken during the boom years.
Mr Graham did warn, however, that “today's decision makers are faced with different challenges in a changing environment” and that, “a new wave of major gas and iron ore projects are needed to maintain these levels of investment in the longer-term".
