Record mining splurge makes global impact in 2011

The China-driven commodities boom transformed economies and environments across the globe in 2011, a year that saw cashed-up mining giants invest record amounts into extracting Earth’s riches.

From Australia’s barren interior where plans were approved to create one of the world’s biggest open pit mines, to the Amazon rain forest where vast copper deposits were targeted, the mining craze went into overdrive.

Thanks to historic high prices for iron ore, gold and a wide range of other natural resources, mining companies had the money to splurge across the globe in a phenomenon that both changed lives and raised environmental fears.

“The most significant trend this year was that most mining companies have come through the GFC (global financial crisis) with very robust balance sheets,” Royal Bank of Scotland senior mining analyst Warren Edney told AFP.

“With those robust balance sheets, they can spend a lot of money. It’s going on everywhere.”

Mining companies’ capital expenditure surged to a record €109 billion around the world this year, up from €78 billion in 2010 and less than €31 billion in 2003, according to RBS research.

China’s seemingly insatiable appetite for all kinds of natural resources to fuel its historic modernisation and remain the world’s manufacturing hub was the main driver for the high commodities prices. Even though prices cooled in the second half of the year amid a range of global economic uncertainties, mining titans pressedon with their expansion plans, believing that the commodities boom will transcend short-term crises.