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August 24, 2012
BHP Billiton’s news about falling profits and that it was shelving the planned $20 billion expansion of Olympic Dam (a uranium, copper and gold mine) is a clear indication that the mining boom is winding down. It was subdued commodity prices, declining terms of trade, and higher capital costs associated with removing billions of tonnes of overburden at Olympic Dam that was the basis of BHP Billiton’s decision.
Mining booms collapse in the face of global economic crises--China’s economy has slowed in response to the economic crisis within the eurozone and the sluggish state of the US economy. The peak in investment in Australia is close. The temporary boom doesn't do that much for increased employment and income within Australia, given the hollowing out of the manufacturing sector.
So where to now for Australia? We do need to start thinking about a "post-resource" Australia. Will it be a transition to a low-carbon economy? A deeper engagement with an information and /or digital economy? Will the focus be on brains and high-quality products---a brains-knowledge-information-skills based society that protects the environment?
We have probably seen the the last gasp in the expansion of the coal, oil and gas industries as tge economic transformation is underway with the fossil fuel industry on the defensive.
Will there now be a massive investment in education and training now that we realize that the future of Australia is not in the resource-based industries. Nor is it in manufacturing at the low grade product low-skilled end. It is more in the high IT end.
The Liberal Party have reversed their position from smashing and tearing down the NBN anymore to accepting that the NBN is there to stay. They propose to build a cheaper NBN---a Fibre-to-the-Node (FttN) instead of Fibre to the Premises (FttP) --its short term thinking.
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MIke Rann claimed the mining boom would swiftly change the economic foundations of South Australia. There was no end to the ore at Olympic Dam and it was going to deliver for decades to come.
The boom never happened in South Australia. So the sky isn't going to fall in.