Mining recovery reaches the coalface

Mining recovery reaches the coalface
  1. Mining recovery reaches the coalface
    The commodities mini-boom moves beyond share prices and macro data and is starting to be felt at ground level, NAB…

The mini-boom in commodity prices that has sparked a rally in mining shares is finally starting to show up in more than top-level data, NAB says.

"The early macroeconomic effects are becoming more apparent not only in the statistics but also on the ground," the bank's economics director David de Garis wrote in a note to clients.

  • Share on Facebook SHARE
  • Share on Twitter TWEET
  • Link
Signs are emerging that mining companies are slowly hiring again. Signs are emerging that mining companies are slowly hiring again. Photo: Glenn Hunt

Thanks to a resurgence in Chinese steel production as well as industry reforms in the country, the prices of key Australian commodities including iron ore, thermal coal and coking coal have surged over the past year. Iron ore prices alone have doubled over the past 12 months to about $US92 a tonne.

The rises contributed to the strong rebound in fourth quarter GDP, which rose at an annual pace of 2.4 per cent, while national income jumped 6.4 per cent courtesy of soaring terms of trade. Meanwhile, gains in mining stocks easily outpaced the broader market over the past 12 months as profits in the sector rebounded.

  • Share on Facebook SHARE
  • Share on Twitter TWEET
  • Link
Last years commodities rally came as a surprise to many. Last year's commodities rally came as a surprise to many. 

All that was starting to feed some improvement at ground level, Mr de Garis said, pointing to a mix of indicators such as job ads as well as anecdotal evidence.

While miners were still keeping costs under tight control – unlike at the peak of the last boom – "there is a measure of 'catch up' in spending by resource companies", he said.


"Cutting corners, reducing maintenance and not spending according to what might be deemed best engineering practice now seems to have eased somewhat."

On top of that, mining services companies were reporting a pick up in enquiry rates for prospective new orders, while there was also anecdotal evidence that miners were again buying new equipment and increasing spending on repairs and maintenance.

  • Share on Facebook SHARE
  • Share on Twitter TWEET …
  1. Tracking Brisbane's tallest buildings through the years - Football
    03.23 / 10:07
    Brisbane's upward journey began when City Hall was completed in 1930, with a clock tower that dominated the skyline for 40 years until the city entered the age of the…
  2. Liquor reforms promise of a safer Civic; but let's wait and see - Football
    03.23 / 09:18
    The smaller, "boutique" style, venues who stand to gain most under the ACT government liquor law reform package this week aren't usually the types of places targeted by "pre-loaded" thugs in search of a bit of biff as part of their night, or usually early morning, out on the…
  3. Six banned Essendon Bombers to return, plus top draft pick Andrew McGrath - Football
    03.23 / 09:08
    There will be a mix of the old and the new for Essendon in their captivating round one clash against Hawthorn with No.1 draft pick Andrew McGrath joining six previously banned Bombers in the…
  4. Bell Shakespeare's Richard 3 comes to Canberra with Kate Mulvany - Football
    03.23 / 08:25
    This new production of the Shakespearean tragedy was inspired by Bunuel's The Exterminating Angel and Truman Capote's Black and White Ball, among other…
  5. West Coast's Eric Mackenzie back in favour at the Eagles - Football
    03.23 / 08:25
    Forgotten West Coast defender Eric Mackenzie is back in favour at the Eagles with the backman picked for the round one clash against the Roos at Etihad Stadium on…
  6. Sydney Rabbi Pinchus Feldman tells royal commission he is 'not familiar' with child protection policies - Football
    03.23 / 08:25
    A Jewish leader has admitted to a royal commission he was not across the detail of his organisation's child protection…
  7. Thornlie man charged after dramatic chase through Perth suburbs - Football
    03.23 / 08:20
    The man crashed his Holden Commodore sedan into a solid brick…
  8. Western Force offer fans shares in club - Football
    03.23 / 08:15
    The Western Force want to prove to the ARU and SANZAAR that it would be a $10 million mistake to get rid of them - but first they need fans to put their money where their mouth…
  9. Joe Cleary looking to reclaim Albury Gold Cup with Chaquinta - Football
    03.23 / 08:10
    The Queanbeyan trainer has only ever been to Albury once - for one…
  10. Liberal North Shore candidate downplays council amalgamations as byelection issue - Football
    03.23 / 08:10
    The Liberal North Shore byelection candidate Felicity Wilson is banking on voters being angrier about traffic on Military…
  11. Canberra Raiders hooker Josh Hodgson puts hand up to play for England in Pacific Test against Samoa - Football
    03.23 / 08:06
    But he won't be catching up with the England coach while he's in…
  12. Canberra Raiders use cryogenic chambers to help with short turnaround before Brisbane Broncos - Football
    03.23 / 08:06
    Canberra Raiders pull out all the stops to battle short turnaround and the Brisbane…
  13. Saia Faingaa to play first game for ACT Brumbies in almost decade in Super Rugby return - Football
    03.23 / 08:06
    ACT Brumbies name team for clash against Otago Highlanders in Super…
  14. Taking higher road on law - Football
    03.23 / 08:00
    Bill Shorten is clearly key to Labor's parliamentary law-making…
  15. Highlanders fire barb at Brumbies ahead of Super Rugby hoodoo-mission in Canberra - Football
    03.23 / 08:00
    Brumbies target hoodoo-breaking clash against Highlanders at Canberra…
  16. Jacqui Lambie is upset and angry - but not ashamed of her story - Football
    03.23 / 07:56
    It wasn't the overdue bills Jacqui Lambie was thinking about as she delivered a speech that gripped…
  17. The Cat Haven issues public plea as resources reach 'breaking point' - Football
    03.23 / 07:56
    "Cat Haven is asking people not to buy their cat from Gumtree or other online sites but to adopt a shelter…
  18. Australia v India Test series 2017: Josh Hazlewood turns heat on Virat Kohli before fourth Test - Football
    03.23 / 07:51
    Josh Hazlewood has declared India captain Virat Kohli is feeling the pressure as Australia dare to dream of pulling off a series victory that would trump even the conquering of the final frontier in…
  19. How bad can a tweet be for business? Ryan Holmes should know - Football
    03.23 / 07:51
    What if you're putting yourself out there as a thought leader advising companies how to build brands on social media, but you tweet a lewd suggestion to a reporter whose story you don't like? Nothing much good, as Ryan Holmes…
  20. Why Australia shouldn't be cowed by London attack - Football
    03.23 / 07:46
    Terrorism is one of the least likely ways for people in Australia to die. But vigilance is…