Australia's mining boom "last of its kind": leading economist

Australia's booming commodity market is unsustainable and may be the "last of its kind," a leading economist has told delegates on the opening day of the International Mining and Resources Conference (IMARC) in Melbourne, Australia on Tuesday.

Saul Eslake, a former chief economist of the ANZ bank, said the state of the mining industry -- which has been the backbone of Australia's economy over the past decade -- was only likely to deteriorate further in coming years.

"The commodities boom Australia has just experienced in the last 12 or so years is the last of its kind in human history unless unforeseen technological developments ordain otherwise," Eslake, who resigned from a senior position at Bank of America Merrill Lynch in June this year in order to run his own consultancy firm, said on Tuesday.

The economist believes that the joint investment from China and India in Australian commodities over the past two decades could not be matched by new developing markets such as Indonesia and Vietnam, often touted as the next golden goose by mining and commodity experts.

"The countries that are still to develop are much smaller than China and India are -- they are not, in most cases, starting from as far back on the development curve as China was in 1979 or India was in 1991, and most of them are much more self-sufficient in commodities than China or India ever were," Eslake said.

The answer to Australia's dwindling mining market, according to Eslake, was diversifying and expanding the nation's economy, a quest made easier by Australia's Free Trade Agreement (FTA) with China, which passed through Australian parliament's upper house, the Senate, on Monday.

However, Eslake said more needed to be done to safeguard Australia's future economic prosperity.

"Australia needs to broaden and deepen its economic development with Asia if it is to prosper from the next phase of Asian economic and social development. That means we need to increase our exports of agricultural commodities and services as well as maintain or improve our market share in minerals and energy commodities," he said.

"The free trade agreements that Australia has signed with some Asian economies will be helpful in that regard but they are not magic bullets."

Eslake forecasted a major downturn for commodity prices such as iron ore and coal over the next 12 months due to Australia's "unfavorable position in international cost curves."

The three-day IMARC conference, held at Melbourne's Convention and Exhibition Centres, is expected to attract 3,000 industry insiders and regulators around the globe, and aims to promote best practises, idea sharing and international networking.

The event is supported by both the Australian and Victorian-state governments, with the Federal Cabinet Minister for Resources, Energy and Northern Australia Josh Frydenberg pencilled in to speak on the final day of the conference.

Chief Executive Officer (CEO) of Orica, the largest provider of commercial explosives to the mining and infrastructure companies in the world, Alberto Calderon and the director of technology, geoscience and engineering at BHP Billiton Bryan Quinn will also present lectures at the conference on Wednesday as keynote speakers. Endit