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“The investment downturn will continue in oil and gas, and will hurt the Northern Territory and Western Australia. “It reached a peak of $40 billion, and is slated to fall to $16 billion at the trough, and we aren’t yet near that point.” The BIS report aligns with a study by Newport Consulting that found investment is at an all-time low but is showing some very early signs of ‘green shoots in a cold market’. Built from interviews with 50 mining executives, Newport suggested there was a “slight revival” in attitudes towards the state of the market. Of those interviewed, 16 per cent of mining leaders said they were cautiously optimistic about growth prospects in the next 12 months, and leaders who showed no signs of optimism fell from 93 to 84 per cent. Regardless of these minor improvements on the impoverished sentiment of the last three years, capital expenditure continues to plunge, as the number of leaders reporting a reduction in capex jumped from 44 per cent up to “an overwhelming”  78 per cent, which Newport said was the most pronounced capex reduction seen in five years of reporting. According to one president of a $34 billion company: “No Capex is being approved. As a new business we are seeking to reduce our back office costs. We will become lean and mean while supporting essential Capex spend in production.” Four out of five mining leaders are planning workforce reduction, in line with BIS Shrapnel’s findings, and up 50 per cent on last year’s retrenchment intent, while none indicated plans increase boots on the ground or administrative and managerial roles. For junior miners and explorers this dearth of investment may spell doom. Access to capital, investment, and funding are the number one concerns for junior miners and explorers according to the annual junior mining and exploration (JUMEX) companies report. “This has been the number one constraint for the past three years,” Association of Mining and Exploration Companies (AMEC) CEO Simon Bennison explained. According to a recent report by SNL Metals, there has been a 50 per cent drop in the number of financings by companies with annual revenue of less than US$500 million; this represented the lowest number of financings by exploration companies since at least January 2012. “Things appear most dire in Australia, which attracted 15 per cent of total financings in 2013-2014 but has fallen to only 5 per cent of 2015 financings to date,” SNL stated. When it comes to actual cash on hand, the situation is grimmer still. Approximately 30 per cent of Australian juniors have less than $500,000 in capital while close to 10 per cent have less than $100,000. “With half of our respondents planning a fund raising within six months and 29 per cent having a cash balance of less than $500,000 competition for capital remains extremely fierce and unfortunately there appear to be few positive signs of any improvement in investor interest in the short term,” Grant Thornton’s JUMEX report said. However the BIS Shrapnel report was not completely pessimistic about the state of mining. It predicted that the growth in production, as the industry shifts from the investment heavy construction phase into a new era of output, and the growth in maintenance operations aligned with this development, will expand over the next five years. “Overall, BIS Shrapnel estimates essential oil diffuser the mining industry represents around 20 per cent of the national economy, given strong growth in production and related services combined with a (falling) level of investment,” BIS stated. “In terms of production alone, the mining industry represents nine per cent of the national economy.” “A significant volume of capital that has been injected into the mining industry is still to fully translate into expanded mine production,” BIS Shrapnel economist and report author, Rubhen Jeya said.

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