Mourning the golden goose: is the boom really behind us?

Dump trucks continued to haul ore along red dirt roads yesterday.

Freight trains continued to roll along their lonely outback railways, and the shiploaders at Port Hedland continued to pour their rivers of rubble into the belly of giant ships bound for China.

Yet far from this scene of productivity and prosperity, Australia's resources boom was having its eulogy prepared.

Auditing agency Deloitte predicted the resources sector was just two years away from irrelevance and Australian taxpayers would soon need to find another goose to lay golden eggs.

The comments lit a fire of debate across the nation, despite the fact Deloitte were far from first-movers on the idea.

The federal Resources Minister, Martin Ferguson, and BHP Billiton chairman, Jac Nasser, have both warned recently that certain aspects of the boom had seen their headiest days, and any punter watching the sharemarket in recent times will have twigged that something significant is going on.

So could the best of the resources boom really be behind us? The answer depends on how you choose to measure it.

The resources boom has manifested in many ways, from record commodity prices to extraordinary company profits, from huge export volumes to unprecedented job opportunities for Australian (and foreign) workers.

On some of those measures the boom is undoubtedly on the wane, but on others, the best is seemingly yet to come.

Those with fingers on financial pulses have been lamenting the decline of the boom for some time.

What began with weakness in the off-Broadway commodities like nickel and manganese has started to filter through to headline acts like coal and iron ore - the commodities that deliver the biggest revenue hits to the Australian government.

Benchmark iron ore prices famously topped $US180 per tonne in 2011, but have spent much of 2012 in a range between $US125 and $US150 per tonne, as Chinese demand for the steel-making ingredient has cooled.

Similar declines have struck benchmark prices for both thermal coal and coking coal, both of which are now 30 per cent cheaper than they were just months ago.

"From here on in, the premium prices are gone," said Minister Ferguson on a recent trip to Perth.

The view is shared by mining companies and the analysts that cover them, with almost every major investment bank revising their commodity price forecasts downward in recent weeks.

In JPMorgan's case, forecast iron ore prices are now typically 10 per cent lower than previous estimates, meaning prices are expected to remain close to $135 per tonne rather than test $US150 per tonne as previously thought.

Widespread agreement that commodity prices have passed their peak has convinced a bearish investment community that share prices should also bid farewell to their dizzy heights.

Despite the fact companies like BHP, Rio Tinto and Fortescue Metals Group plan to significantly increase export volumes, investors have sold them down to share prices not seen for three and four years.

"If you are judging the resources boom by the stockmarket you would be pretty depressed," said mining industry veteran Warwick Grigor from Canaccord BGF.

"Certainly from the stockmarket's point of view the curtains are coming down [on the resources boom], but the stockmarket always looks well into the future and it always overshoots."

Suspicions the boom was past its peak were reinforced earlier this month when China reported a growth rate of 7.6 per cent: well below the double-digit growth rates of recent years.

The fact that China is forecast to import a bigger volume of iron ore - and several other commodities - every year for the next decade, seemed to gain less traction.

Grigor says Australians should remember the boom goes beyond iron ore and coal, with other commodity prices holding up better than the big two.

"You have still got gold going well, you've got copper which looks pretty strong and there is still a big boom in gas," he said, referring to the LNG boom in WA and Queensland.

Out in the suburbs, average Australians with little direct involvement in financial markets might find it harder to believe claims the resources boom has passed its peak.

The Australian dollar remains well above parity, and the bout of "Dutch disease" brought on by the strength of the resources sector continues to threaten the jobs of those who work in industries like retail, manufacturing and tourism.

An ever-increasing number of Australians are heading towards the mines and offshore rigs for work, and those that aren't are being seduced in increasingly creative ways.

In April, Rio Tinto launched a campaign to recruit 6000 workers to its diversified operations, while other companies like OZ Minerals are promoting the concept of a mining career with an inner-city lifestyle: filling billboards with images of fly-in fly-out workers enjoying Melbourne's laneway cafes.

According to the federal employment department, the number of Australians working in the mining sector is expected to grow by 7.5 per cent every year between now and 2017, when the sector is predicted to employ just under 343,000 people.

That forecast could prove overly optimistic if poor economic conditions prompt companies to abandon some of the $230 billion worth of proposed new projects.

Indeed, some cracks have already appeared, such as Rio Tinto flagging redundancies last week at a coal mine in Queensland, and warning that expansion at another is unlikely to proceed.

But with another $270 billion worth of new projects confirmed as going ahead, it's clear that in terms of workforce participation, the peak of the mining boom is still ahead.

Amid the varying perspectives on whether the boom has passed its peak, what's clear is that on every measure, the boom is not over.

Even at their newly lower benchmark prices, the major bulk commodities are fetching prices that are much higher than a decade ago.

BHP's share price - lamented for hitting a three-year low last week - is still three times higher than it was a decade ago.

The boom may be cooling on some measures, but on every measure, it's still pretty warm out there.

ANATOMY OF A RESOURCES

BOOM PRICES

Experts agree that prices for key commodities like iron ore and coal will not return to the highs seen in early 2011.

HAVE PEAKED

VOLUME OF EXPORTS

Australias major resource companies BHP Billiton, Rio Tinto, Fortescue, Woodside, Santos, Newcrest Mining will produce bigger volumes of their products in the years ahead.

HAS NOT PEAKED

SHARE PRICES

With most major miners hitting multi-year lows, there is widespread agreement that stocks are past their highs.

HAVE PEAKED

EARNINGS

The big resource companies will report lower earnings this year than for 2011. But some mid-tier players will report record highs. The tension between lower prices and bigger volumes will determine whether record earnings can be revisited in the years ahead.

UNCLEAR

JOBS

The Bureau of Statistics expects a higher proportion of Australians to be working in minerals, petroleum and energy sectors in the years ahead than today.

HAVE NOT PEAKED