The biannual Resources and Energy Major Projects report released by the Bureau of Resources and Energy Economics revealed a boost in investment, considering committed investment just six months ago was at $260.8 billion.
The $268.4 billion investment evaluation consists of 87 projects that have received a final investment decision, including 51 minerals projects, 18 gas and petroleum projects and 18 infrastructure projects.
The report identified that 11 “mega” projects accounted for $201 billion of that investment, or 76% of the total committed investment in resources and energy projects.
Mega projects were classified as having a cost of more than $5 billion and BREE noted that most of these large-scale projects were LNG projects in the Pilbara region of Western Australia and Gladstone in Queensland.
However, they also included CITIC Pacific Mining’s Sino Iron Ore project and Rio Tinto’s Cape Lambert port and rail development.
“Mega projects continue to be the principal driver of the record level of investment in the resources and energy sectors,” BREE executive director and chief economist Quentin Grafton said.
In the six months to October, 10 projects worth $13.2 billion were committed to after receiving a positive FID.
The largest of these was for an additional LNG train at the Australia Pacific LNG plant in Gladstone.
Despite investment increasing, BREE noted that Australia’s resources and energy climate had changed substantially since its last report in May.
This was due to the recent drop in peak commodity prices, which led to some investment decisions being delayed or reconsidered.
The report said both the number and value of projects progressing to the committed stage had fallen in the last six months, with 10 projects receiving a positive FID in the six months since April 2012.
By comparison, 21 projects were committed from November 2011 to April 2012.
There are currently 12 iron ore projects with a combined value of $26.2 billion at the committed stage and 17 coal projects at the committed stage worth $14.4 billion.
There are no nickel, aluminium or bauxite projects at the committed stage.
Projects at a feasibility stage include the Roy Hill iron ore project, the Browse and Arrow LNG projects and the Carmichael coal project.
Ferguson welcomed the strong level of resources investment Australia was boasting.
“To put Australia's investment in oil and gas in perspective, the total committed expenditure on these projects is comparable to the cost of the Apollo moon program in today’s prices” he said.
“Although we have seen commodity prices cycle down recently, this report shows that we have a solid pipeline of potential investment in resources and energy.”
