Resource prices to rise: ABARE

THE 1998-99 recovery of mineral and energy prices is forecast to continue, with average prices likely to rise more than 5 per cent in 2000-01, according to the Australian Bureau of Agricultural and Resource Economics.

“While announcements of production cutbacks and facility closures for some commodities contributed to increased prices, the price turnaround was mainly a result of increased demand following economic recovery in Asia and sustained economic growth in the US and Europe,” an ABARE report into the sector said.

“The continued growth forecast for Australian mine production in 2000-01 is a legacy of substantial real increases in both exploration expenditure and new capital expenditure that were recorded over the six years to 1997-98.

However, the Australian Bureau of Statistics expects exploration expenditure to fall a further 6 per cent in the coming year.

“A sustained period of higher prices will be required for aggregate exploration expenditure in Australia to turn around,” the ABARE report said.