Investment committed to Australian resource projects rose by nearly A$8 billion in the six months to the end of October, while the number of projects declined, in part underscoring rising construction and labor costs in Australia's resources sector amid weakening demand.
Committed investment in major resources and energy projects in Australia increased to A$268.4 billion according at Oct 31 from A$260.8 billion recorded at the end of April, government figures released on Wednesday show.
"Looking forward, any substantial net increase to the dollar value of committed projects will require either cost increases to larger, existing projects and/or a new final investment decision on a large project within the coming year," said Professor Quentin Grafton, Executive Director of Australia's Bureau of Resources and Energy Economics (BREE).
The number of projects at the committed stage of the investment pipeline has declined by 11 since April 2012 release because of completions, Grafton said in a statement.
Declines in most commodities prices, driven by a drop-off in demand from China, has caught many by surprise and forced miners — from the world's largest, BHP Billiton, down to the smallest — to review their investment plans.
The commodities rout has thrust Australia into a debate over whether the mining boom is over and can no longer be relied on to create jobs, power growth and raise tax revenue in a $1.4 trillion economy that has gone 21 years without a recession.
Miners concede the days of ever-rising prices, which in the past eight years earned them record profits and prompted $70 billion of Australian investment, look to be over.