Is the mining boom done and dusted?

Mining stocks have taken a beating from investors' expectations over the past year, but there may still be companies worth buying.

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Mining stocks have taken a beating from investors' expectations over the past year, weighing in on billionaires and everyday investors all the same, but is it actually over?

According to the Bureau of Resources and Energy Economics (BREE), more than $140 billion worth of projects have been delayed or cancelled in the past 12 months. Investment bank Citigroup (NYSE: C) has also said 2013 would mark the end of the "commodities supercycle".

In its latest semiannual report on major projects, BREE announced 18 big developments that were listed, were valued conservatively and the $140 billion is a modest estimate of the combined total. Contributing a massive amount to the overall figure was Woodside Petroleum's (ASX: WPL) Browse LNG project, which was valued at $36 billion in deferred spending. However, some have said the cost was closer to $80 billion before Woodside agreed to pull the plug.

The reduced investment accounted for approximately 11% of the country's overall $268 billion spent on resources projects this year. By 2017, the amount of investment is tipped to be back at similar levels to where it was in 2007. High risk exploration spending in the December quarter was $264 million, a 16% decline from the preceding quarter, but it is likely to have fallen a lot further since new bosses at BHP Billiton (ASX: BHP) and Rio Tinto (ASX: RIO) decided to cut spending.

Citi analysts say that, "This year should provide full affirmation that the commodity supercycle has finally ended and should usher in the first 'normal' year in over a decade in which, broadly, commodity prices end the year lower than when the year started".

Foolish takeaway

This year the mining boom may certainly be declared over. However, now more than ever we should be looking for bargains in the industry. Companies that we know will still be around in years to come. No doubt, mining services stocks will be dealt a big blow but it would be a shame to miss out on some quality companies that rise from the industry come 2014.

The Australian Financial Review says "good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit." Get "3 Stocks for the Great Dividend Boom" in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool contributor Owen Raszkiewicz owns shares in Rio Tinto.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »