Report finds signs of optimism in the Australian mining industry
In its annual Mining Business Outlook Report, Australian firm Newport Consulting found that for the first time in more than three years miners in Australia are “optimistic about plans for growth, not just for survival.”
Newport Consulting interviewed 50 leaders in the Australian mining sector to get a pulse of the industry and that there has been a dramatic jump in mining confidence, with 43 percent of respondents saying they are optimistic about the outlook over the next year, up from just 15 percent a year ago.
However, the survey found that some of the issues that have restricted the industry continue to impact the recovery, including the nation’s complex approvals process. Gina Rinehart, chairperson of Hancock Prospecting was interviewed for the report and said the present government has done little to cut the cost and time burden imposed on the industry.
“We’ve not come out of the downturn but the miners are telling us the cycle is beginning to turn,” Newport managing director David Hand told The Australian.
“This is the first time in three years that the industry is clearly showing signs of revival, not just a flicker of life but a distinct positive shift in sentiment and outlook.”
Hand said while there would be no rush of new projects, miners were starting to spend again on their operations after a period of treading water as slowing Chinese growth forced lay-offs, closures and restructuring. Newport’s report includes an interview with Rinehart, who said the Coalition had not delivered on promises to streamline red tape on project approvals.
“Since the first half of 2014, the Australian federal and state governments have been well aware of the iron ore and other commodities price crash and continued uncertainty,” Rinehart said. “Yet little has been done to actually address and reduce the onerous and expensive problems it has created for the resource sector.”
Just under a quarter of survey respondents said they wanted the government to reduce red tape, in a question that was not asked last year.
The survey found 27 percent of respondents were planning to increase spending and investment this year, up from 16 percent last year.
The proportion of employers looking to cut workers, at 48 percent, was still significant but it is down from 80 percent a year ago, while those planning no changes in hiring had jumped from 4 percent to 44 percent.
Respondents looking to hire jumped from none to 8 percent.
Hand said the responses were indicative of cost cuts and productivity drives over the past couple of years.
“The mining community has now put in place what it needs to survive, which is bringing -optimism,” he said.
While the survey indicates a growing feeling that the worst is behind the industry, there was little improvement in price expectations, with just 23 percent of respondents expecting prices to increase this year, compared with 21 percent last year.