The Reserve Bank of Australia says Australia is benefiting less from the second resources boom because of the high level of imported goods.
In its quarterly statement on monetary policy the RBA said the spill-over effect from mining to non-mining industries was smaller than it had been in previous booms.
It said while there were huge expansions in the industry, much of the material for mining projects was coming from overseas.
It said much of the benefits and profits of mining expansions were also going offshore.
“The surge in mining profits has also increased income accruing to overseas residents in the form of dividends and retained earnings, reflecting the high share of foreign ownership in the mining sector,” it said.
The RBA said most estimates suggested four fifths of Australian mining operations were effectively owned by foreign interests.
The quarterly statement said Australia’s resource export earnings had increased by almost 90 per cent over the past five years due to a 60 per cent rise in commodity prices.
It said growth in Australia’s export earnings was likely to slow in the future, as the expansions of miners would be offset by easing commodity prices.
The RBA said mining investment was expected to grow, with a “large stock” of projects expected to commence over the coming year.
“A large share of the inputs used for these projects is imported rather than sourced domestically, due to the type and scale of the mining projects,” it said.
It said the $146 billion of LNG projects currently underway would be “relying extensively on imported large modularised components.”
The RBA also said the foreign ownership share of the mining industry was “significantly higher than for other industries” although foreign ownership varied significantly by commodity and individual mine.
Previously Greens leader Bob Brown said Australia’s mining sector was 83 per cent foreign-owned, and said the figure put weight behind introducing the mining tax.
But Fortescue Metals Group chief Andrew Forrest told a mining conference earlier in the year mining companies needed foreign investment.
“It’s absolutely proper and correct that a country which is under-capitalised compared to its potential, like Australia, raises capital overseas,” he said.