The Office of the Chief Economist’s latest edition of Resources and Energy Major Projects, suggests that investment in Australia’s resources projects has entered a new growth cycle. The publication is an annual census of resources and energy projects (worth over $50 million) in the development pipeline, and explores trends in exploration and project development.
This year’s project list includes 335 development projects, covering more than 20 different resources and energy commodities. The report shows that projects in their early stages (from first announcements to final investment decisions) are growing, which is a positive sign for long-term investment. The value of committed projects (which are generally further along in the development cycle) has also increased by 30% over the past year.
Several significant factors have driven this growth:
Slightly offsetting this, tough global conditions and low energy prices have weighed on the development of coal and LNG projects, with some being deferred as a result. Finance is likely to remain difficult for these projects.
The previous commodity boom led to record levels of investment to unlock Australia’s massive commodity deposits. However, this investment declined sharply as projects reached completion and the commodity cycle shifted towards exports. It is now clear that commodity investment has turned a corner, with a new investment cycle emerging amidst a surge in technological change and shifts in the global economy.
For more information, access the Resources and Energy Major Projects report