Business confidence in the mining sector is in free-fall, says a report released today.
Newport Consulting’s annual Mining Business Outlook is based on interviews with the nation’s mining industry leaders.
The 2013 report shows significant antipathy towards Australian government policy, together with a lack of confidence in the economy and global market.
“It is a more negative sentiment than what we witnessed in last year’s report, and confidence is the lowest since this report’s inception,” the report says.
“Last year we witnessed a visible slowing down of the sector and our report was one of the first to bring significant national attention to the mining boom’s imminent end,” Newport’s managing director David Hand said.
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“This year the situation has worsened and we’re now seeing the effects of the slowdown with a surge in the number of mining leaders who are not optimistic about their business prospects, a sharp increase in companies slashing CAPEX spend, and an increase in mine closures.
“BHP, one of the world’s largest coal mining companies, recently closed two central Queensland mines and more are likely to go.
“Jobs are being cut across Australia; in the past 12 months, close to 9000 mining jobs have been lost in NSW and Queensland alone.
“Just as in the boom years a multiplier effect cascaded through the economy, we are now seeing the end of the boom follow that same path, affecting support industries, government revenues, terms of trade and jobs.”
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Hand said that while the outlook is gloomy, the downturn is an opportunity for those companies able to rethink their approach to operational excellence and management of mine operations.
The report shows dissatisfaction with the Federal Government, pointing the finger at industrial relations policies.
“It is evident from the mining leaders interviewed that there continues to be wide discontent surrounding the government’s failure to adequately support the sector over the last 12 months,” the report said.
“Dissatisfaction with the strength of the unions and inflexible IR regulations also rose sharply in this year’s report.
“The unions and IR were the main government gripe this year for 27 per cent of mining leaders, and second on their list of concerns.
“Mining leaders also issued a strong call for the government to strengthen national infrastructure this year.”
Read the full report here.
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