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Mineral sector investment boom over



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Media Release

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ABAREInnovation in E conom ic ResearchGPO Box 1563, Canberra ACT 2601 Facsimile (02) 6272 2001 International code 616 "http:// www.abare.gov.au18 March 1999Mineral ^sector investment boom over‘Following strong mineral resource sector investment growth in recent years, the number of resource projects under construction and in active planning is falling’, Dr Ed Shann told the OUTLOOK 99 Conference in Canberra today.Dr Shann, Director, Access Economics, said that the fall reflects deferral of projects due to the downturn in demand and prices. He noted that the driving forces for mining investment have been cheap transport costs, which have provided a competitive advantage in Asian markets; technological changes; and structural changes, which have improved the efficiency and financing of the mining industry. However, ‘the current world environment will cause a fall in resource investment and a need to focus even more on the competitiveness and viability of a smaller range of projects. In the longer term the underlying structural characteristics of the industry are the drivers of performance and enhancing those should be the main aim of policy’, he said.In presenting a case study in investment attraction and facilitation (the Starwood MDF project in Tasmania), Mr Neville Smith said that the combined efforts of the Tasmanian and Commonwealth governments were critical to the decision by the Japanese company, Hokushin, to invest in Australia. Mr Smith, General Manager, Starwood Australia Pty Ltd, said, ‘Major Projects Tasmania and Invest Australia developed the investment opportunity, brought it to Hokushin’s attention and then worked very closely with Hokushin leading up to its decision to proceed with the Starwood Australian Project’.While noting that this type of support is invaluable, and that Hokushin appreciates the assistance it received, Mr Smith also emphasised the need for Australia to maintain a competitive investment environment in order to attract overseas companies considering investing offshore.Mr Bruce O’Meagher, Invest Australia, drew attention to the government’s commitment to increasing productive investment and to the positive role that the provision of a one step shop approach to Commonwealth Government approvals, through Invest Australia, plays in securing such investment. Mr O’Meagher said that while there could be some slowdown in mining investment in the near term, there is considerable potential for offsetting investment in other sectors, including for mining services.Speakers at the session, ‘Major resource project facilitation’, were: 4 m Bruce O’Meagher, General Manager, invest Australia Dr Ed Shann, Director, Access Econo'niic's Mr Neville Smith, General Manager, Starwood Australia Pty LtdFor further information contact:During the conference, Margaret Day, OUTLOOK Media Centre on (02) 6276 5242 or 018 487 825 After the conference, Mr Ian Haine, ABARE on (02) 6272 2031ABARE acknowledges the support o f its major O utlook conference partner,Cisco Systems.