Aussie Mining Mania

[Pro-Life]

Australia's May Trade Surplus Widens on Overseas Shipments of Coal, Gold
By Jacob Greber - Jul 5, 2010

http://www.bloomberg.com/news/2010-07-06/australia-s-may-trade-surplus-widens-on-overseas-shipments-of-coal-gold.html

Australia’s trade surplus widened in May as exports of coal and gold outpaced a gain in imports.

The surplus swelled to A$1.65 billion ($1.4 billion) from a revised A$1.12 billion in April, the Bureau of Statistics said in a report in Sydney today. The median estimate in a Bloomberg News survey of 21 economists was for a A$500 million surplus.

Australia’s trade surplus is being fueled by a surge in prices for iron ore and coal shipped by companies including BHP Billiton Ltd. Signs of a rebound in mining investment may gather pace in coming months after resource companies agreed with Prime Minister Julia Gillard’s government on the introduction of a new industry tax last week.

“Coal and iron ore exports benefited from the large increase in contract prices,” Riki Polygenis, an economist at Australia & New Zealand Banking Group Ltd. in Melbourne, said ahead of today’s report.

The central bank, forecast by all 22 economists surveyed by Bloomberg News to keep borrowing costs unchanged at 4.5 percent today, said commodity prices rose 3 percent in June, climbing for a third month.

Imports rose 4 percent in May to A$23.1 billion. Consumer goods imports gained 4 percent and capital equipment shipments such as aircraft and industrial machinery jumped 10 percent.

Exports gained 6 percent to A$24.7 billion, today’s report showed. Coal exports rose 10 percent and non-monetary gold jumped 66 percent.

Asian Demand

Increasing demand from Asia is stoking an investment boom in Australia’s resources industries that is forecast by the central bank to last more than a decade.

Concerns that the mining boom may worsen a shortage of workers and drive up inflation are among reasons Governor Glenn Stevens has increased the central bank’s overnight cash rate target from a half-century low of 3 percent in early October to 4.5 percent in May.

To contact the reporter for this story: Jacob Greber in Sydney at [e-mail]