SYDNEY, Dec. 13 (UPI) -- Investment costs in Australia's resource sector must be cut to maintain a good pipeline of projects, a government official said.
"Australia is still exceptionally well placed from an investment point of view," Australia's Minister for Resources and Energy Martin Ferguson said Thursday I a report in The Australian newspaper.
"We've got a good pipeline of investment but our capacity to maintain that investment pipeline is going to be very much related to our capacity to actually reduce the cost of investing in Australia."
The minister's comments follow the release Wednesday of a report from the Bureau of Resources and Energy Economics predicting that the country's resources and energy exports would be worth $184 billion in 2012-13, down $9 billion from the previous year.
That's the second downward revision by BREE and an about-face from six months ago when Asia-led demand was strong enough that the bureau was predicting a bumper year in which exports would total $209 billion.
The bureau predicts that revenues from iron ore, the country's leading export, will fall 13 percent and the value of steel making coal exports will fall 24 percent.
"Further growth in Australia's export earnings from resources and energy will depend on increased volumes. This is because resource commodity prices, with a few exceptions, are not expected to return, in real terms, to their historic highs of 2011–12," the report states.
A BREE report last month showed record investments in Australian resources and energy projects, with committed investment of $280.2 billion for 87 major projects.
Separately Thursday, the Minerals Council of Australia released a report identifying four major hurdles to investment in the country's mining sector: constrained labor markets, an onerous approvals process associated with mining activities, inadequate capacity planning and economic regulations.
"Rebooting the boom places a premium on cost control, timelines, flexibility and adaptability along the full length of the minerals supply chain," the report states.
In a report for The Conversation, Jeffrey Wilson from Murdoch University's Asia Research Center, says that references to a "bust" in the Australian mining industry are overstated.
"The resource boom is not turning to bust," Wilson says in the report.
Instead, he says, the investment- and employment-heavy development stage experienced by the sector is winding up, and announcements of new capital expenditure by mining companies will become less frequent, while cost saving exercises will become more common.
Wilson maintains that such an environment "is hardly the alarmist scenario that some in industry and the media have portrayed."