The End of the Mining Boom – Fact or Fiction?

Is the mining boom really coming to an end or is it something to put down to over analysing and panic?
Recently on news reports, twitter feeds and LinkedIn status’ I’ve seen the topic of ‘The end of the mining boom’ pop up. I’ve wondered to myself how much of this is fact and how much is as likely as the Mayan prophecy about the end of the world coming true.

As much as mining seems to be in a quiet period the pessimism that surrounds it is obviously driving people towards this glass half empty mentality. Whereas coal, iron ore and nickel have seen better days there’s still positivity surrounding gold and some other commodities.

Tim Nicholls, Queensland treasurer, has even said himself that despite high profile companies holding back on operations and additionally the closure of Rio Tinto’s Blair Athol coal mine in Central Queensland I’m still sceptical about this being a signal for “the end of the mining boom”.

The latest Resource and Energy Quarterly released in March 2012 by the ‘BREE’ predicts that this year’s record earnings of $199 billion by owners like BHP Billiton will continue to surge and reach a new high of $225bn within the next 5 years. Demand for commodities continues to have momentum and some mining companies have never had it better.

So, whereas the doubters don’t see light at the end of the tunnel until the situation in the EU is sorted I’m taking the perspective that it’s just a bad day at the office and with the positivity seen at the beginning of the week with the commodity prices and confidence in Germany’s backing of the European Central Bank’s bond-buying plan, is it too optimistic to see this as being the start of a rejuvenation? Only time will tell.

Jon Taylor