Investors rush to join Australia outback mining boom

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Sydney, Oct 23: The Australian outback’s abundance of iron ore, nickel, and other minerals is attracting a swelling number of overseas investors, who are acting as if the raw materials boom fuelled by China, will go on for years.

As more mines open up across the mineral-rich deserts, Japanese firms who have been investing in Australian mining for decades are vying with Russians, Ukrainians, Chinese, and others for partnerships with local prospectors. “Australia is on everyone’s map, it’s one big free-for-all,” said Eagle Mining analyst Keith Goode, who scours the outback by four-wheel drive or in light planes assessing prospects.

Forecasters say there is no end in sight for demand yet for Australia’s rich minerals veins, which were seen adding AUD 116 billion to the nation’s export revenues this year - 8% over 2006. “This boom is opening up unexploited regions across the country,” said Christopher Rowe, chairman of Northern Star Resources Ltd and a longtime mining investor working with Chinese parties to transport Australian iron ore.

The rush to grab a piece of the outback is being egged on by what Australia’s Macquarie Bank calls a “once-in-a-generation demand boom” for minerals. The boom hinges on China’s willingness to import much of the raw materials it needs to support its massive industrialisation, rather than better exploit its own natural resources.

“China is a very big part of the Australian resources boom and no one can really say when it will end, but markets run in cycles,” warned James Wilson, an analyst with DJ Carmichael & Co.

It’s not the first outback mining boom. In the late 1960s, a small nickel find sparked a global hunt for the metal that eventually led to more bankruptcies than millionaires, leading Time magazine in 1969 to label it Australia’s “nickel and dime boom”. At least one investment group is looking to provide direct luxury air service from Perth to London and the Middle East to accommodate travel plans of international financiers. There’s no danger of iron ore supplies running out anytime soon.