SYDNEY--Attracting new investment into Australia's mining sector
is going to be challenging, Resources Minister Martin Ferguson
warned Wednesday after BHP Billiton Ltd. (BHP) scaled back plans
for a massive mine expansion and said it won't approve any new
projects until at least mid-2013.
The remarks by the government minister backs up recent
commentary from the central bank and market analysts that
Australia's once-in-a-century mining boom is quickly cooling amid
falling prices for iron ore, coal and other key commodities.
One of the main defenses in Australia's economic arsenal has
been a promise by business to invest hundreds of billions of
Australian dollars in new mining sector projects over coming
years.
The bulk of that planned spending should still be secure but
getting new projects off the ground will be tougher, Mr. Ferguson
said.
"In terms of new investment, it is going to be challenging for a
variety of reasons for some time to come," he told reporters in
Canberra.
BHP said it will scale back a planned expansion of its Olympic
Dam copper and uranium mine and defer development of a Queensland
coal deposit as it moves to conserve cash due to weaker demand for
commodities from China, Australia's biggest trading partner.
Some industry leaders have criticised the ruling Labor
government for introducing new mining and carbon taxes which they
say fuel regulatory uncertainty and could act as a brake on
investment plans.
Mr. Ferguson rejected those claims and said the government had
done everything it could to promote BHP's proposed spending in
South Australia.
"This was always the project that was always going to be hard to
get because of the capital-intensive nature," Mr. Ferguson said.
"This is clearly a commercial decision by the BHP Billiton board,"
he added.
Write to Enda Curran at enda.curran@wsj.com
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