SYDNEY, May 22 (UPI) -- A new report from the Australian government says that committed investment in the country's major resources and energy projects has peaked.
The report, released Wednesday by the Bureau of Resources and Energy Economics, says that in the past 12 months, around $146 billion of projects have either been delayed, canceled or have had reassessed development plans.
BREE predicts investment to fall from $261 billion for confirmed mining and energy projects in 2013 to about $68 billion in 2017. Resources investment, it says, would revert back to 2007 levels from 2017 onward, as major projects were delayed.
"High-value projects continue to be the main driver of the record high levels of committed investment in the resources and energy sectors," said Quentin Grafton, BREE's executive director and chief economist, in a statement.
Mega projects valued at over $4.9 billion account for around 80 percent of the $261 billion in committed investment.
Of the 73 projects still under construction, 40 are minerals projects, 18 are gas and petroleum projects and 15 are infrastructure projects.
"While BREE projects a likely decline in the stock of committed project investment, there remain opportunities for Australia to generate a higher level of committed investment," Grafton said.
But that will only happen if many of the projects which BREE rates as "possible" are able to progress through to the committed stage over the next five years, he added.
"The decline in the number of committed projects reflects the emerging trend for high value projects at the feasibility stage to be delayed or canceled, while the value of committed investment has remained close to record high levels due to cost increases to several key projects," he said.
Nikki Williams, chief executive of the Australian Coal Association said earlier this year that the country's coal sector is at "a terrible junction where not only has the international market come off in terms of prices but our costs and productivity have gone to a terrible place."
About 9,000 jobs have been cut from the sector in the past 15 months, the association says.
Rio Tinto plans to cut costs more than $5 billion through the end of 2014, BHP Billiton says it has carved $1.9 billion of annualized costs from its cost base, and Xstrata is leaving projects, warning that most of Australia's coal sector is "under water" and the company will have to reduce costs just to survive, the Business Spectator reports.
The Reserve Bank of Australia also said in a report this month that the peak in the level of resources sector investment in Australia was likely this year.