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The global mining boom has shifted into top gear because of growing demand and surging commodity prices, with profits of the world's 40 largest miners reaching a record $US110 billion ($102B) last year.

This figure represented a 156% jump on the previous year and the start of a new stanza of growth that is forecast to continue as global demand increases and new projects are brought on stream. Last year's profits were built on record revenue of $US435bn, according to a PricewaterhouseCoopers report. To keep pace with demand the top 40 global companies had announced more than $US300bn worth of capital programs, of which more than $US120bn was planned for this year, doubling last year's capital expenditure. Australian Bureau of Statistics data showed that locally, miners expected to boost spending by 86% to $92bn in 2011-12 from a year earlier.

Australia is tipped to be well placed to capitalise on the new era in mining and benefit most from the ‘step change’ in demand. The mining industry recovered from the global financial crisis better than any other sector and the report highlights that, despite the surge in production and new developments, assets were funded almost entirely by equity. This shift also reflects the alternative sources of capital now available to the industry, as the new era has ushered in an increase in joint ventures, off-take funding and other arrangements, the report says.

Excerpt from: The Australian (www.theaustralian.com.au), 7 June 2011