The Australian mining industry is poised for growth, with iron ore, gas, coal, and gold leading the next phase of development. The industry has also seen significant investment in the development of lithium mines on the back of growing demand for battery storage devices.
The Australian Government December 2018 quarter report shows that more than 25 mining projects had reached the committed status, with dozens more in the feasibility stage.
Western Australia leads the way as the region with the most projects presented. As a result, Perth property market predictions indicate that the local real estate market is set to bounce back.
Below are a selection of five key projects to keep an eye on:
Adani coal mining – Queensland
Adani Australia chief Lucas Dow says that the company will be exporting coal from the Galilee Basin by 2021.
Furthermore, he claims the mine will create 8,250 jobs. “During the ramp-up and construction phase, we’ll see over 1,500 direct jobs created in north and central Queensland and a further 6,750 indirect jobs, and importantly, they’re jobs that otherwise wouldn’t exist in Queensland.”
Narrabri Gas Project – New South Wales
The Santos’ Narrabri Gas Project is seeking government approval to develop its natural gas reserves in northwest New South Wales.
The project could supply NSW with up to half of the state’s natural gas needs. Santos claims that if given the green light, the project would bring substantial economic benefits to Narrabri and the region.
Chevron Gorgon Gas Expansion – Western Australia
The highly anticipated Gorgon Expansion project (GS2) has officially been given the green light. With an estimated $5.1 billion in investment, the project will include new wells in the Gorgon and Jansz-lo fields, as well as drilling subsea installation and pipe-laying.
The expansion is expected to create hundreds of jobs in the resources sector. WA Premier Mark McGowan said the project would bring growth for the state, and the employing of local people would be emphasised.
Koodaideri iron ore mine – Western Australia
Rio Tinto has confirmed it develop the Koodaideri iron ore mine near Newman. The project is expected to cost $3.5 billion and is set to create the most technologically advanced iron ore mine in the world.
It is expected to create more than 2,000 jobs during construction and 600 ongoing production roles.
BHP South Flank Mine – Western Australia
BHP announced it would construct a $4.7 billion South Flank mine in WA’s central Pilbara.
South Flank will become one of the world’s largest iron ore operations and is expected to create 2,500 jobs during construction and 600 ongoing operational roles.
Is this the start of another mining boom?
This burst of activity in the mining industry comes after a dearth of mining investment over the past five years.
Experts talk about an uptick but emphasize that the current circumstances do not match the “once in a generation” mining boom seen between 2004 and 2012.
Nevertheless, these upcoming projects are set to give Australia’s economy a much-needed boost. States such as Western Australia, who have been hit the most with the decline of the mining industry, are set to benefit the most.
WA Treasurer Ben Wyatt says “The WA economy is very much on the uptick. “
Talking about the BHP South Flank Mine project, Mr Wyatt adds, “It highlights the fallacy some people have around the idea that the mining sector simply goes bust — it doesn’t, it changes, it morphs into a new phase and this is a new phase for BHP and an exciting time for the WA economy.”
Analysts are warning the state might struggle to meet the labour demands of the projects.
During the height of the mining boom, Western Australia had six major oil and gas projects and several large iron ore mines underway simultaneously. This put huge pressure on the local workforce and forced local authorities to fly in tens of thousands of workers from interstate and overseas.
Essential services like schools, hospitals and housing felt the squeeze and the local government was forced to intervene and spend millions of dollars in infrastructure.
While this round of investment is not as substantial as what we’ve seen in the past, WA is already feeling the pressure, with skills shortages already emerging in some sectors.
Residents in the areas surrounding these upcoming mining projects are welcoming the investments, hoping they will help revitalise their communities. Some WA based real estate agents are already claiming positive effects in the local market
Property investors
Looking to buy a positively geared property in a mining town? Make sure you do your homework before deciding if this type of investment is right for you.
It is recommended that you educate yourself by reading a wealth of resources, which can include websites, podcasts, attending seminars or seeking guidance from a property mentor. It is essential to keep up-to-date with industry news and educate yourself on concepts such as property cycles, market trends, and the difference between a negatively and positively geared property.
It is also a good idea to talk to experts such as financial planners who can give you property Investment advice and help you set up a strategy based on your individual circumstances and goals
Read more: Perth property market predictions – when will it be a good time to invest?
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