The talk of the recent AIMEX show in Sydney, attended by International Mining, was a report looking at the future of the Aussie mining industry that highlights just how much potential for growth remains, but also warns against complacency. The landmark report by ANZ Bank and economic consultants Port Jackson Partners, released exclusively to The Australian, and reported on in the paper on September 9, estimates that A$2 trillion needs to be invested in the Australian economy for the nation to capitalise on the mining boom caused by the developing world’s march towards urban industrialisation. The report said that Australia “stands poised to capitalise on an economic transformation unparalleled in the nation’s history, with a resources and commodities boom capable of generating A$480 billion of exports in the next 20 years and creating 750,000 jobs.”The report finds a new economy will be formed, based primarily on mining, but the benefits will flow through to the services, education and tourism sectors. It forecasts that commodity export earnings will grow from A$210 billion in 2010 to A$480 billion by 2030, shoring up the nation’s revenue growth. The number of workers employed in the mining industry is expected to more than double from 693,000 to 1.45 million.
“This is not the stuff of a routine commodities boom but rather a more fundamental global process under way that will see billions more people achieve middle-class living, and it has decades to run,” the document says. Entitled Earth, Fire, Wind and Water, the report warns Australian policymakers to resist the temptation to try to slow the boom and urges them to guard against “Lucky Country” complacency. Instead, The Australian piece urges the government to show greater political and policy leadership and encourage investment to lift economic output and increase the nation’s capacity.
Writing in the paper, ANZ chief executive Mike Smith said the nation is facing more than a one-off mining boom saying that “a major structural shift is underway.” He urges the government to broaden its approach in managing the supercycle to ensure the benefits flow through to the rest of the economy. He adds: “Australia is currently experiencing the kind of ‘problem’ that makes us the envy of the rest of the developed world. If Australia can expand capacity rapidly enough, export revenues from hard and soft commodities could reach half a trillion dollars in real terms by 2030. The scale of investment required is unprecedented.”
The report forecasts up to A$1.8 trillion needs to be injected into the economy to allow Australia to maximise the benefits from the growing appetite in China and the region for commodities. But it warns the transformation will not happen without a greater focus on increasing the size of the nation’s skilled workforce; tapping foreign capital, including Chinese ownership of mines and farms; reversing the productivity slump; applying new research and development; and accelerating planning and water access approvals for mine and farm development. The next waves of the boom are forecast to create 758,000 full-time jobs in export-related sectors over the next two decades, with nearly 400,000 of those positions on investment projects alone.
