Actual capital expenditure on mining in Australia - Data and Analysis (1988-2034)

IBISWorld estimates actual capital expenditure on mining to ease by 0.8% in 2026-27, to $49.9 billion. The primary driver of this decline is the wind-down of Woodside's Scarborough LNG development and Santos' Barossa project, both of which have transitioned from peak construction into commissioning and early production, removing a combined multi-billion-dollar annual capex contribution from the series. In previous years, elevated prices for several commodities, including oil, gas, coal and gold, drove capital expenditure into mining. However, a downward trend in the prices of various commodities, including sharp falls in minerals like nickel and lithium has reversed this trend. Several high profile nickel and lithium projects have been put on hold amid a steep decline in the global price of nickel and lithium. Recent geopolitical and trade tensions are also diminishing some miners' optimism, deterring them from investing in new ventures. On top of falling prices, mining firms have faced elevated borrowing costs amid structurally higher interest rates on a global basis, which has made it increasingly difficult to finance capital expenditure. These intersecting trends are forecast to drive a dip in capital expenditure on mining over the year.After falling significantly since 2012-13, mining investment trended upward between 2019-20 and 2023-24, before easing in 2024-25 as weak commodity prices and margin pressures weighed on miners' appetite for new and expansion projects. The pandemic initially induced significant uncertainty, generating widespread volatility across global commodity markets. At the height of the pandemic, travel restrictions caused global transport activity and energy demand to fall sharply, leading to a decline in oil, gas and coal prices. Conversely, robust iron ore and gold prices supported capital expenditure by producers of these commodities during the pandemic. Overall, these mixed conditions led to capital expenditure on mining remaining flat up to 2020-21, at which point global demand picked up while supply chains struggled to keep pace and commodity prices started to surge. These trends were accelerated by the Russia-Ukraine conflict, which drastically disrupted global energy supplies and sent the price of coal and gas soaring. Responding to these trends, investors funnelled capital into mining projects, seeking to capitalise on an export boom. Elevated commodity prices, combined with a post-pandemic surge in economic activity and the commencement of major LNG construction programs including Woodside's Scarborough development and Santos' Barossa project, were the key drivers of strong growth in the level of capital expenditure into mining since 2020-21.Capital expenditure on mining has been exceptionally volatile over the past two decades. Economic growth and urbanisation across Asia, particularly China, has boosted demand for construction materials and other resources. Australia's proximity to these markets and its access to high-grade mineral deposits have bolstered demand for Australian commodities in Asian markets. These trends led to an influx of investment in new mines and export facilities, with capital expenditure on mining reaching a peak of $131.9 billion in 2012-13, in 2023-24 dollar terms. The completion of Australia's major liquefied natural gas infrastructure has removed a major driver of capital expenditure on mining, leading to significantly lower levels of capital investment over the past decade compared with the mining boom period. Overall, IBISWorld estimates actual capital expenditure on mining to have grown at a compound annual rate of 0.9% over the five years through 2026-27.