CANBERRA/MELBOURNE, (Reuters) – Australia declared the end of the resources boom which had cushioned the country against the global financial crisis, a day after the world’s biggest miner BHP Billiton shelved two major expansion plans worth at least $40 billion.
“The resources boom is over,” Resources and Energy minister Martin Ferguson told Australian radio yesterday. “We’ve done well — A$270 billion ($282 billion) in investment, the envy of the world. It has got tougher in the last six to twelve months.”
Ferguson’s comments came after BHP announced it was indefinitely delaying the planned $20 billion-plus Olympic Dam copper expansion in South Australia and plans to build a new harbour, estimated at more than $20 billion, to nearly double its iron ore exports in Western Australia, looking for cheaper alternatives.
Fuelled by Chinese-led demand for its coal, iron ore and other resources, Australia’s economy was one of the very few in the developed world to sail through the global financial crisis without sliding into recession.
The resources boom fuelled what has been dubbed a two-speed economy, which has pumped up the Australian dollar and exacerbated the pain felt in manufacturing sectors and retail in Australia’s most populous states.
While manufacturers, like Ford and Bluescope Steel , have shut down plants and axed jobs, Australia’s unemployment level has stayed around 5 percent, thanks to substantial jobs growth in resources projects, where truck drivers command six-figure pay packets.
FEAR MAY BE PREMATURE
Politicians may be worried the whole economy is moving into the slow lane, but analysts say the fear is premature, as energy projects, underpinned by customers who have already been locked in, will continue full steam ahead.
