This will force mine contractors to be more innovative in their service offering, he told the ABC’s Inside Business. Transfield Services, which receives 40% of its revenue from the mining industry, last week cut its profit guidance by 30%.
“Clearly, in the mining services sector, there has been a significant slowdown,” he said.
“All the discretionary expenditure in the mining sector slowed down dramatically two or three months ago and we're also seeing delays in what will be probably essential work being done, but probably most of it's been pushed out of this financial year into next.”
Hunt said many suppliers and contractors to the mining industry had become too used to the easy conditions presented by the mining boom, but they would now have to work harder to capture growth.
“I think…a number of sectors have been spoilt by the fact that the growth has been stronger for longer than is normal in terms of business cycles,” he said.
“But at the same time we've seen that the cost of investments in capacity in the mining sectors and elsewhere has been increasing so the efficiency and the returns on those investments have slowed down. And then at the same time there's been the higher Australian dollar and some softening in the commodity prices.
“Now while overall this country is doing better than many, that's started to hurt the performance of many of our clients, which of course makes it tougher for us.
“But on the other hand, actually, you know, the kind of business that we do, being involved in outsourcing, creates opportunities for us.
And looking forward I would see that our clients would be looking at smarter ways of doing things and often turning to companies like us is a way to achieve that.”
Hunt said the focus would also be more on price now as mining companies must seek to preserve capital and reward shareholders with dividends.
“With a number of our clients, they understand that what's important to them is the overall cost or the value that's created out of investments that they've made in capacity,” he said.
“I think it's important to understand that the slowdown in the mining sector is really about the slowdown in investment.
“It's not about the slowdown in production. In fact there's billions of dollars been spent in extra productive capacity which is running right now and will continue to run at similar levels for a long time.
“Much of what we do is about providing the services necessary to maintain those facilities over the life of the asset, which is in many cases 30 years or more. We're not exposed to the two-year construction cycle in a big way. We're very exposed to the 30-year asset life.”
