Why the outlook for minerals in 1984 is 'relatively subdued'

It would be hard to find a more graphic illustration of how the minerals sector has lagged behind the rest of Australia's rebounding economy than on the front pages of the national press March 20.

The same papers that carried federal Treasurer Paul Keating's exuberant projection of 10 percent economic growth for the country this June over last also carried reports that the Mounta Isa mine, the nation's largest, would be shutting down copper mining and milling operations for two weeks, April 16 through 29.

The mining sector, which has in times past pulled the Australian economy along like a roaring locomotive, is dragging this time. The stimuli that have sparked the domestic recovery haven't touched the export-oriented mining sector. It will have to await a solid worldwide recovery heavy on plant construction and other forms of capital formation.

The hard lesson for a country with its hopes pinned on its mineral wealth has been that the minerals with which it is so wondrously endowed are worth only what the market is willing to pay for them, and right now, that is not very much.

At the Mount Isa Mines headquarters here in Brisbane, spokesman Collin Myers plays down the shutdown. ''We'll not be mining copper ore nor milling it, but we'll be still smelting copper, and still mining silver, lead, and zinc as usual . . . We just won't have such a big (copper) inventory hanging over us.''

The shutdown is being achieved by requiring some 2,000 miners, one-third of the work force, to take their regular vacations now. ''It was a convenient time to do it, because of Queensland school holidays and Easter,'' Mr. Myers says.

''This is a short-term problem,'' he adds, ''a matter of getting our costs down. We're brimful of confidence. We have good ore bodies and thick seams of coal. And it's not a uniformly bleak picture. The international marketplace is recovering from recession.''

Still, John MacLeod, chief economist at the Melbourne-based CRA Ltd., the largest general mining group in Australia, projects a ''relatively subdued'' year for for mining, for these reasons:

* US inflation rates unusually low for a recovery phase. ''Booming commodity prices are not consistent with relatively restrained inflation.''

* Structural decline in demand for minerals. ''The Western world has learned to get along with less of a lot of things. For every unit of output, people are using less mineral input.''

* The willingness of third-world nations to sell their minerals output below cost for foreign exchange.

Mr. MacLeod also comments that the period from 1980 to 1983 was a time of great expansion in minerals. As a result, ''If you look ahead for the next five years, it's hard to see the need for any new mines in Australia.''

But looking still further ahead, he is bullish on a new generation of minerals techniques and technology. In coal, for example, ''What we're going through is a technological revolution from underground mines to huge open-cut mines, which lower the costs of production dramatically.''

He cites CRA's coal mine at Blair Athol in Queensland, newly opened. ''There something like 90 feet of coal in a seam; whereas it's common in an underground map in Europe to mine just 10 inches. The coal at Blair Athol has little overburden, and moreover doesn't have to be washed. That's what I mean by a very competitive technological newcomer in mining.''