Do we really need another resources boom?

We’ve still got a hangover from the last one.

I spent this morning at the Rockhampton Regional Major Projects Forum, hearing from State and Federal Government, Adani Mining and the Curtis Island GLNG Project.
Deputy Premier Jeff Seeney promised that the Galilee Basin will be like the Bowen Basin all over again, only bigger, and that it heralds a new resources boom for Queensland.
Do we really want another boom? Are we ready for it so soon, with Adani Mining due to ship first coal in 2016
Booms are ALWAYS followed by busts – just like we are having now in the resources industry.

So how come we are only ever prepared for the boom, not the bust?

How come whenever the coal (or iron ore, or gold…) price hits the sky, all companies set about digging like there is no tomorrow, and the high prices are treated as the new normal?

Don’t the major companies have trained economists and planners who know that prices always revert to the mean?

I ask these questions whenever I get the opportunity at gatherings such as the Forum this morning. and the answer is always the same.  “That’s just how it is”.

Trouble is, that regional mining communities get to be the collateral damage of bad planning decisions. And small businesses usually buy into the story as well – gearing up to serve the mining boom, only to be summarily cut off when the industry goes over the edge of the cliff.

So, talk of another mining boom – bigger than the last one, and when we’re still suffering from a hangover – makes me very cautious, and I suspect that many small business owners in resources areas will feel the same.

Don’t get me wrong – we all want to see the price of resources recover from the doldrums, and get some life back into our industries and communities.

Rather than launch enthusiastically into another resources boom frenzy, can we do this in a bit more of an orderly fashion this time?

By Bronwyn Reid
19 November 2014

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