The value of advanced projects to build mines and oil and gas fields is 24 percent higher than the A$34.9 billion reported in October by the Canberra-based Australian Bureau of Agricultural and Resource Economics. The bulk of the increased spending came from the approval of three new iron ore projects valued at A$7 billion, the bureau said today on its Web site.
Mining companies are boosting output as prices for commodities reach records driven by demand led by China, the world's fastest growing major economy. Prices for iron ore, used to make steel, have risen for five straight years to a record, while nickel, lead and tin also touched records this year.
``China's growth has continued to outperform anyone's expectations, and there's been a continual struggle to expand to meet that,'' said Gerard Burg, energy and minerals economist at National Australia Bank Ltd. in Melbourne. ``We've still got a trend of several more years of very strong capital investment.''
Shares of BHP, the world's biggest mining company, rose as much as 33 cents, or 1.1 percent, to A$30.98 on the Australian Stock Exchange, and traded at A$30.90 at 1:24 p.m. Sydney time. Shares of smaller rival Rio Tinto Group fell as much as 1.6 percent.
China Demand
China's economy, the world's fourth-largest, grew 11.1 percent in the first quarter, accelerating from 10.4 percent in the previous three months and spurring demand for materials to build skyscrapers, bridges, roads, cities and cars. Steel- product output in China, supplier of one-third of global steel, rose 21 percent in April, the National Bureau of Statistics said today. Industrial output rose 17.4 percent, it said.
Prices for copper, nickel and other metals will remain high for several decades as demand from India and China climbs, said BHP Chief Executive Officer Chip Goodyear on March 26. The company's Rapid Growth 4 A$2.8 billion iron ore expansion in Western Australia state was added to the latest project list.
Copper rose the most in a week in New York yesterday after imports into China, the world's biggest consumer of the metal, used in pipes and wires, surged 61 percent in the year's first four months.
Australia has a record 279 major projects planned, with 91 considered to be `advanced'. There are 188 projects at less advanced stages or undergoing feasibility studies, the bureau said.
`Sustained Growth'
``These numbers show that investment remains strong, enhancing the prospects for sustained growth in the Australian mineral resources sector,'' said Phillip Glyde, executive director of the bureau. Labor shortages, and higher material and construction costs continue to affect the timing and cost of some projects, he said.
``Project cost pressures and delays are unlikely to ease in the short to medium term while this level of development activity continues,'' he said.
Energy projects account for A$16.8 billion of the planned projects, while there's A$22.4 billion of mining projects and A$4.2 billion of minerals projects planned, the bureau said.
Some of the developments include Mitsui & Co. and Anglo American Plc's Dawson coal project in Queensland state, Rio Tinto's Clermont coal mine, Fortescue Metals Group Ltd.'s Pilbara Iron Ore Project in Western Australia state and Oxiana Ltd.'s Prominent Hill copper project in South Australia state.
