What comes after the mining boom?

For almost a decade significant investment in the mining sector has been propping up the wider Australian economy. Now that the investment has started to run dry the question on everyone’s lips is: “when will we return to a mining boom?”

The last mining boom brought unprecedented salary increases and a knock-on effect of high living costs, which left many of us in the industry shaking our heads and making comments such as “it wasn’t like this when I started my career,” or “this is totally unsustainable,”(while enjoying an expensive bottle of wine in a high end restaurant).

Despite some workers in Western Australia complaining about the so-called greed of the big corporates with their fat cat salaries and bonuses, no sooner has it ended and we’re all longing for the next mining boom. A strong economy is good for everyone.

Will the next mining boom happen this year? Probably not. Many investors are sitting on cash looking for the next high-risk/high-reward venture, and yet nothing exciting seems to be happening at the moment. Better times are coming.

Can it ever be as good as it was? Possibly. China is no longer growing at the same rate, but Asia is still the next superpower and we hold the resources they’ll need to build their future.

Have we wasted the opportunity of a lifetime? No. There is plenty of positive speculation, such as the renewed interest investing in the Mid West. But no sooner than you read a positive article, another one shoots it down, citing factors such as the medium-term outlook for iron ore prices.

Mining is cyclical and better times will return. With this in mind WA businesses need to remain nimble. Organisations need to manage their cost base closely, but must not cut too deep into their structures otherwise they will not be in a position to react quickly enough and may miss the opportunity to make the most of the next boom. If you worked through the last boom and don’t feel you made the most of it, be sure not to miss out a second time, it may be the last chance.

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