From NAB today comes this little note on a big subject, the developing pipeline of major mining projects:
AUS: Resource project listing sky-rockets to $232bn from $173bn in April
Prior to the release of the Government’s mid year review of the Budget this morning, an updated listing of major resource development projects has also been released this morning.
And in a sea of external defensiveness and worry, this six-monthly Australian update of its resource development projects has gotten even larger, now bursting at the seams. The listing from the Federal Bureau of Resource and Energy Economics (BREE) has seen the value of underway/ committed projects (termed “advanced” by BREE) soar to $A232bn, some 16.6% of GDP. That’s up from $A174bn (13% of GDP) only six months ago and $A132bn (10.0% of GDP) last October (see first chart below).
The boost this time comes from the addition of several large-scale LNG projects including Wheatstone, APLNG and Prelude LNG (Shell’s offshore floating platform LNG project) as well as BHP Billiton’s commitment to develop the Caval Ridge coal mine in Queensland.
What an extraordinary circumstance. Just imagine where we’d be without this investment? Yet, at the same time, we’re now deep into the LNG leg of the boom, which the RBA and other economists have already described as having limited direct benefits to the nation. There are still the longer term benefits of exports and tax revenues, as well as perhaps 20% of dividends staying here.
And this is the same day that the MYEFO has announced a $20 billion Budget black hole and slashed spending in the forward estimates.
It’s quite a disjunction.