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Australian officials are sparring over the status of the country’s mining industry, with Resources Minister Martin Ferguson telling the media that the nation’s mining boom is officially over with the news that BHP Billiton Ltd. has delayed approval of its Olympic Dam expansion that Deutsche Bank AG estimated at A$33 billion ($34.7 billion).
“You’ve got to understand, the resources boom is over,” Ferguson told Australian Broadcasting Corp. radio yesterday. “It has got tougher in the last six to 12 months.”
BHP is the world’s largest mining company, and its announcement earlier this week that it would not likely approve any spending on major projects this fiscal year due to a decline in metal prices is bad news for Australia, whose economy has soared with major investment projects in iron ore, coal and natural gas.
With general elections due next year, BHP’s announcement will hit Prime Minister Julia Gillard’s government hard, making it nearly impossible to balance the country’s deficit and bring the budget into a surplus status by the stated goal of mid-next year.
The key opposition Liberal National coalition will benefit most from the so-called end of the mining boom.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com