Mining Journal reported that Australia's mining sector surprisingly spent more on investment last quarter, despite falling commodity prices and a dire global economic outlook though firms did cut spending plans for the full fiscal year.

Government figures released recently showed that the latest estimate of spending for the fiscal year ending in June 2009 was AUD 38.21 billion. The comparable estimate for the 2007/08 fiscal year had been AUD 30 billion.

Government data showed that the mining sector spent a record AUD 8.33 billion in the Q4 of last year in inflation adjusted dollars, which analysts said helped account for the rise. Spending was up 4.9% from AUD 7.94 billion in the Q3 and well above the AUD 6.27 billion spent in the Q4 of 2007.

Mr Mark Pervan Australia & New Zealand Bank senior commodities strategist said that "The easy way to address declining cash flow expectations is to pull back on CAPEX, which is less painful than shutting down operations and firing people."

Australia's exports were a boon when global growth and commodity prices were strong. But now six of the country's top 10 trading partners are in recession and Australia is on the brink of one. Coal and iron ore prices roughly tripled in Australian dollar terms over the six years to mid 2008. But since the last round of lucrative price talks on bulk commodity sales, prices have plunged.

(Sourced from Mining Journal)