Australia is now seeing a transition from the investment phase of the resources boom to the production phase as newly developed projects commence commercial production according to a report by the Australian Bureau of Resources and Energy Economics (BREE).
Over the past decade, Australia has seen a rapid escalation in investment in resources and energy projects fuelled by higher global commodity prices. However, lower commodity prices and rising costs have created a more challenging investment environment and contributed to a decline in the number of projects moving through the investment pipeline.
The BREE report pointed out that the projects completed over the past 12 months have added considerably to Australia's production capacity and will support strong commodity export volumes into the future. While iron ore prices currently support investment, access to export infrastructure remains a challenge for emerging developers of iron ore projects.
According to BREE, iron ore projects remain one of the largest sources of potential investment in Australia and at the end of October there were 19 projects worth a total of between $35.8 billion and $55.8 billion at the Publicly Announced Stage. The number of iron ore projects at the publicly announced stage has not changed since April 2013, meaning no iron ore projects identified in April this year progressed to the feasibility stage and none were identified as being cancelled.