Managing director of Innovation Gold, Max Shawcross told the AusIMM North West Queensland Regional Mining Conference that a gear change could happen despite all the doom and gloom stories about closures and job losses in the mining industry.

“Copper has been steadily down for five years and 40 percent, zinc too has been pretty flat for five years but may be on the rise, lead also down for five years, we’re in the quagmire now wondering how much longer could this possible go for,” Mr Shawcross said.

Mr Shawcross said economic growth and investment went in cycles of six to 10 years and his analysis of factors such as real GDP, Australian exploration expenditure, interest rates, base metal prices, the All Ords Index, and Mergers and Acquisition activity suggests we were nearing the bottom of the cycle. 

“I’m confident enough to say the bottom of the cycle will be next year in 2017,” he said.

“And when the recovery comes, mining prices will be driven by higher commodity prices which will be driven by higher demand.”

Mr Shawcross said that demand would come from four key markets, China, Europe, the US and Japan.

China soaks up 50% of north-west Queensland’s resources and Europe, the US and Japan take up another 25%.

“We’re in the buy mining investment phase now,” he said.

“Mining companies should be ceasing to look at cutting costs.

Mr Shawcross said we were seeing examples of increased spend at places like MMG Dugald River.

“Companies need to get strategically aligned for the upturn,” he said.

Mr Shawcross said the final takeout message from his talk was that the rest of the world was wagging Australia’s tail.

“Or to put it another way, it’s dragging Australia by the tail.”