Australia’s mining industry capex hits all time record in FY 2009-10

Based on Australian Bureau of Statistics (ABS) survey data, new capital expenditure in the Australian mining industry is estimated to be AU$41.3 billion (US$34.38 billion) in FY 2009-10, six percent higher than in FY 2008-09, according to a report released by the Australian Bureau of Agricultural and Resource Economics (ABARE). In real terms, new capital expenditure in FY 2009-10 was the highest on record and more than three times the average annual expenditure over the past 30 years ($12.9 billion).
 
There are indications that capital expenditure in the mining sector may increase further in 2010-11. Based on industry intentions surveyed by the ABS in the last quarter of 2009, capital expenditure in the mining sector in 2010-11 would be around AU$49 billion (US$40.72 billion). If this expenditure is realized, this would represent a 19 percent increase on 2009-10 expenditure.
 
A total of 12 metal mining projects with a capital expenditure of AU$7.7 billion (US$6.4 billion) were completed in the six months to April 2010. Among these projects, there were two iron ore projects with a combined capital expenditure of AU$3.5 billion. The largest of these projects is BHP Billiton's US$2.15 billion Western Australian Iron Ore Rapid Growth Project 4 (RGP4). At full capacity the RGP4 will add 26 million metric tons of additional production to BHP Billiton's Pilbara iron ore operations. Also in the Pilbara, Rio Tinto's 25 million metric tons Mesa A iron ore mine was completed at a capital cost of US$901 million.