Australia has been lucky. It is one of the few developed economies to not dive into recession during the ’08 global financial crisis, it has a Resources and Energy minister (Martin Ferguson) that can claim a resources boom of $270 billion in investment.

However is Australia’s luck running out with the mining sector?

Tom Albanese from Rio Tinto has an optimistic view claiming that RIO is still in a position with plenty of demand, however admitted that the growth rate will never be what it was. This is fair enough, the 2003 mining boom was huge and to keep those results up is not sustainable. The RBA backed this up stating that "It seems likely that mining investment in 2013/14 will remain around its current levels" which is indicative of the fact that it has reached (or is close to) its peak.

This can raise a panic in the market: Once the mining investment peaks, it will no longer fuel Australia's growth in GDP, which means other parts of the Australian economy need to perform in order for Australia to continue to grow. Also if the Australian mining industry is so close to its peak what's stopping the sudden burst of a bubble and subsequent plummet, like it did in the 60s, 70s, 80s and 90s. What makes it more troubling is that iron ore and coal was at its highest and now seems to be sailing to new lows.

Nothing is impossible in the global market, but at least Australia has a safety net: China.

Granted, there is uncertainty over the Chinese economy and its current growth. There are a lot of headlines about China getting slower and slower, seems the inevitable end of its huge growth is coming to a close. There has been a particular decline in the demand of coal and iron ore from China, which takes up twenty-five per cent of Australia’s exports and in turn has caused BHP and other mining companies across Australia to shelve new projects, delay mines and cut down employees.

This doesn’t mean the Chinese demand is to come to an abrupt end. China is still growing; it still wants to improve its economy. Chinese manufacturing firms are still showing signs of expansion. There is a slowdown from the bullet speed demand for resources China had before but it hasn’t stopped. It’s just more of a running pace now. By virtue of that, Australia shouldn’t necessarily plummet, if anything it will remain steady or slowly shift gears.

Optimistically this decline can be beneficial, Australia will have time to learn to focus on proper productivity and work on new ideas on how other parts of the Australian economy can pick up the slack. For this to work the resources industry will have to try and be consistent in handling realistic growth. In essence the demand is still there and prices should stay solid, they just won’t be at the super heights they were before.