Australian resource minister declares end of mining boom

An Australian government minister declared the end of the mining boom in terms of commodity prices on Thursday August 23, after BHP Billiton shelved its Olympic Dam project in South Australia the previous day.

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“The boom in commodity prices is over,” Martin Ferguson, minister for resources, energy and tourism, said.

“Just think about it: coking coal a short time ago was $320 per tonne, it’s now $220 per tonne; iron ore was $180 per tonne, it’s now $105; thermal coal was $220 per tonne, it’s now $80 per tonne,” he said.

“It was great for a short period of time. I think it will be a long time before we see those record commodity prices again,” he added.

But Ferguson noted that the boom continues in terms of investment in Australia, with $270 billion in committed capital investment.

Australia’s prime minister, Julia Gillard, moved to clarify her minister’s comments.

“Ferguson was talking about commodity prices [and] future investment decisions,” she said. “But Australia will continue to see that growth in resources for a long time, with investment being delivered now and further investment in the pipeline.”

BHP Billiton has mothballed a planned $20 billion investment in Olympic Dam, as lower commodities prices and higher costs brought down its core earnings by 7% to $33.75 billion for the fiscal year 2012.