John Maynard Keynes, the originator of Keynesian economic theory, once said in heated debate that “when the facts change, Sir, so does my opinion”

Applying this perspective to the 2011 mining sector, one might wonder whether there is a boom on at all when looking at this year’s share price performances.

So should we change our collective view that there is a mining boom in progress? Have the facts actually changed? One can argue the case from different perspectives of course – but the resounding answer is no: the mining boom is still on, although to shareholders it may not quite feel like it.

The “facts” – meaning the performance of resources equities – have certainly changed from 2010 to 2011.

Back in 2010, the bourse was on fire. A set of 40 companies chosen by your scribe for his book Mining Boom returned an outstanding 118% average gain (median return 38%) in the 2010 calendar year. We will see below that those companies have a lot of work to do to get even close to repeating that performance in 2011.

But have the real economic facts of the mining boom changed?

The answer is a definite “no” from a big picture viewpoint. The mining boom is very much intact: everywhere it seems but on the ASX.

Why? Easy: China’s growth rolls on – and India follows.

Europe and the US are struggling of course but we knew all this in 2010 and we still know it now. China remains the key to global metals consumption growth as it has been for the past decade. Little has changed in material terms on consumption growth.

Back on the supply side, those companies aiming to deliver supply from Australia will all agree there’s a still a boom when it comes to getting things done cost-effectively.

How so? Simple really: because cost pressures are everywhere; pressures that are indicative of boom conditions. Data from CRU Group suggests that building a mine in Australia now costs some 35% more than it did in 2007 – and remember that 2007 was a pre-GFC boom year!

The cost pressures continue on other fronts too: Xstrata, for example, recently cited a rise in Australian labour costs of some 40% since 2009 (CRU Group has this figure at 46% in US-dollar equivalent terms).

Diesel prices also reflect boom times – up more than 40% in Australia in two years (and CRU estimates up by 76% for overseas projects using international benchmarking from 2009 to 2011).

So it appears the boom is very much still on in economic terms; the facts here are compelling. Try telling that to investors though.

Share price data are in stark contrast however: touching up Chapter 10 of Mining Boom on the iPad, the year-to-date performance of the 40 companies profiled therein reveal some considerable insight.

The results aren’t too flash. Believe it or not only three of the 40 companies are in positive territory in share price terms since January 4, the first trading day of the year (to close of trade August 11).

The average return for the 40 stocks was minus 34%. The median return was little different at minus 32%. Not too encouraging at all – but there are always exceptions.

So who has outperformed you might ask? The list doesn’t take long to recite. Congratulations to Atlas Iron (AGO), Exco Resources (EXS) and Hot Chili (HCH)*.

That’s it in terms of companies in the green column from the list of 40 companies.

A very short honour roll indeed: so here’s hoping the winner’s list gets longer as 2011 continues.

Keynesian thinking as to the unchanged big picture facts of the boom suggests that the winners list will indeed see more winners than losers by year’s end. Investors are unlikely to argue with that outcome.

Good Hunting.

Allan Trench is Adjunct Professor at the Western Australian School of Mines and a Non-Executive Director of several resources sector companies. He is the Perth representative for CRU Strategies, the consulting division of independent metals & mining advisory CRU group (allan.trench@crugroup.com).

*Allan Trench is a non-executive director of Hot Chili