Mining industry shrugs off financial crisis Posted Fri Nov 7, 2008 9:36am AEDT Updated Fri Nov 7, 2008 10:40am AEDT FPRIVATE "TYPE=PICT;ALT=Mining truck at Prominent Hill SA" Powering on: the mining industry expects demand from China to continue at high levels. (Oxiana Limited) The peak body representing the mining sector is expecting a significant increase in mining jobs over the next 12 years, despite the global economic downturn. The Minerals Council of Australia (MCA) is forecasting the industry will need another 58,000 workers by 2020. MCA chief executive Mitch Hooke has told AM that even with growth easing in China, the country will continue to urbanise and industrialise, creating a demand for Australia's natural resources. "They're still going to building something like 40,000 to 50,000 skyscrapers in the next 20 years, they've still got a massive migration of people coming out of the western and rural areas into the urban parts of China," he said. "You can't talk about raw materials demand without talking about China and without talking about India and without talking about Brazil and Russia." Mr Hooke says there is no doubt that activity is slowing right now, but the drivers of future growth remain in place. "There will be a shaking out. There is no question about that. Everybody knows that those capital markets have been overleveraged," he said. "That will have some knock-on effects to growth. China's growth will come off sort of 9.5 down to 8.5 per cent. "If they average 7 per cent per annum growth to 2020, they will still have quadrupled their GDP in China." But right now, projects are being shelved. For resources analyst Gavin Wendt that has an upside for prices and profits in what he calls a decades-long bull market. "The fundamental picture as far as commodities are concerned hasn't changed because of what has happened in credit markets over the last six to twelve months," he said. "At the end of the day, the world's population is going to continue to grow. It is going to be insatiable. Unprecedented demand for commodities and of course, whilst all this is happening mining companies are knocking back projects." He says mining companies are leaving deposits in the ground so that oversupply does not force down projects. Resources analyst Gavin Wendt has backed the peak mining body's claims. He told AM demand is expected to snap back strongly during the next decade. "The fundamental picture as far as commodities are concerned hasn't changed because of what's happened in credit markets over the last six to 12 months," he said. "At the end of the day the world's population is going to continue to grow, there's going to be insatiable, unprecedented demand for commodities." Based on an AM report by Richard Lindell.
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