The mining boom is far from over and will reach its peak in two years, according to a report by economic analysts BIS Shrapnel.
Frank Gelber, chief economist at BIS Shrapnel, predicts the peak will come in 2014, as the second half of the decade will see major minerals projects in Queensland and Western Australia for three to five years.
Gelber predicts investments in the mining industry will continue to grow and other sectors will pick up as the mining sector eventually slows.
The BIS report follows Resource Minister Martin Ferguson’s controversial comment last week that the mining boom is over.
Speculation that the mining boom has finished circulated after BHP Billiton announced it would abandon its Olympic Dam expansion in South Australia.
Gelber told SmartCompany that despite any weakening in investment, mining remains extremely profitable, with strong production in prospect.
“The current media discussion is about mining investment, which is stimulating investment-related activity in design, construction, equipment and business services, and adding significantly to our capacity to produce commodities,” he says.
Gelber predicts strong commodity prices will ensure the Australian dollar stays high for a few more years, putting pressure on trade-exposed industries.
He said the point that is being enforced in the report is the mining boom is not over yet as there are still projects to sustain activity.
Gelber said the real question now is about the next round of projects, and how it will impact the economy.