A question you hear a lot in Perth WA these days is: "Has the mining boom bust bottomed?"
I am not sure I know the exact answer, but there is one thing I know for sure. If politicians keep repeating that the worst of the mining boom bust is over and it is all going to get better from here, well then this is almost certainly NOT what is happening. If there is one thing I have learnt very well over the last 40 years or so is that whatever the government tells you; well then, that is almost definitely NOT what is happing or going to happen.
While coal prices are still dribbling along at the bottom of the cost curve, iron ore prices have had a bit of an uptick over the last 14 months or so. Iron ore prices have managed to climb back to the mid-$90s which is about half the price they were during the "boom". However, almost everything you read suggests this is an aberration and that the price is almost certainly going to drop back to a 'stable' price of around $50 per tonne. This stabilisation of the price of iron ore is expected to happen by around September.
Anyway, I think most of the talk about the current prices of coal and iron ore are somewhat irrelevant, unless these prices were to suddenly quadruple.
My view is that, while the actual mining boom bust itself has likely bottomed, the ongoing negative collateral impact of the bust is far from over.
I think that there is a number of years of ongoing pain yet to come from the mining boom and the subsequent bust; mainly as a result of the massive overspending by all concerned when the boom was in full flight. Governments overspent, as did associated businesses, as did the associated workforce. This has left a lot of overzealous debt that now needs to be serviced and paid off—without the benefit of the spare cash from the boom that created it.