SYDNEY, Nov 18 (Reuters) - Spending on resource projects in Australia rose 40 percent to A$112 billion ($104 billion) over the last six months, helped by development of a big offshore gas field and growing global demand for minerals, government data released on Wednesday showed.
Higher prices for everything from copper to zinc to iron ore was encouraging miners and oil companies to dig deeper and faster to recapture markets lost during last year’s global financial crisis, according to the Australian Bureau of Agricultural and Resource Economics.
Energy-related projects under development overall account for around 72 percent, or A$81.1 billion, of the outlay, followed by iron ore mines with 15 percent or A$16.8 billion, the bureau said in a six-monthly report.
“The increase in planned capital expenditure reflects expectations of growing demand for minerals and energy commodities in the medium term,” ABARE Deputy Executive Director Terry Sheales said in a statement.
Zinc prices MZN3 and copper prices MCU3 have doubled since January. RBC Capital Markets this week forecast a 20 percent rise in iron ore prices next year, reversing a 33 percent decrease this year.
Spending is spread across 74 advanced projects, defined as being under construction or committed, of which 38 are energy projects, 31 are minerals projects and five are mineral processing projects.
The increase in large part is due to the $43 billion price tag placed by partners Chevron (CVX.N), Shell (RDSa.L) and ExxonMobil (XOM.N) to develop the Gorgon gas field off Australia’s western coast to supply Asia with liquified natural gas.
Chevron has said the A$43 billion will cover the first 15 million tonne per year phase and that a decision would be made within a year whether to add two further production units, which would add to the cost.
Chevron owns 50 percent of the project. Shell and ExxonMobil each hold 25 percent. ($1=1.074 Australian dollar)