The group said from 2009 to 2011 the downturn in mining investment would continue, even though production would increase over the current fiscal year.
But by 2011 and 2012, investment in mining projects will come back stronger than ever, with multi-billion projects in the iron ore, coal and copper sectors, as well as oil and gas, driving this new boom.
BIS senior manager of infrastructure and mining Adrian Hart said the global recession had “dented minerals demand momentarily” but things were looking much sunnier in the longer term.
“While we are forecasting a decline in mining investment to play out over the next 12 to 18 months, the extent of the decline is now expected to be relatively mild considering the four-fold increase in mining investment since 2002,” he added.
However, the returning strength in the mining sector will bring with it a return of problems endemic to the boom.
These problems include capacity constraints, skills shortages, equipment shortages and inadequate levels of exploration.
The forecaster said to ameliorate these problems, Australia needed to invest in infrastructure and skills now.
BIS Shrapnel said iron ore was looking strong thanks to China, with new development in the Pilbara and the Mid West crucial to meet demand.
Coal investment is expected to fall over the next two years but will remain at historically high levels thanks to Asian demand, with production growth back in vogue from 2011.