Australian mining companies should plan for growth over the next decade as China's economy expands and demand for minerals in India increases, a former Whitehouse economic adviser says.
Gene Sperling, who worked as an economic adviser for presidents Barack Obama and Bill Clinton, says despite the commodities downturn and worries about China, Australian mining companies should plan for long-term growth in China, amid predictions the economy will grow around seven per cent for another 10 to 15 years.
"You're having a slowdown, you've got current problems on the property side but I am not one who buys into the hard landing in China and I think infrastructure will be part of their economic future," Mr Sperling told the Diggers and Diggers mining forum on Monday.
China had the ability to take bolder economic actions quicker than countries which had to deal with messy, sticky democracies, he said.
"They have the commitment to stay there," he said.
"It may look different, there may at times have less needs for some of the metals here but a lot of it will be a bit more similar and I feel optimistic about the medium term demand from China than some of the people at Goldman Sachs, Citigroup and others are suggesting in their reports."
He said demand in India, which is buying three per cent of the world's metals, was bound to increase as infrastructure was built.
"A decade from now, it's not going to be three per cent," he said.
The dramatic super cycle with China happened over a decade and mining companies with a long-term view would be able to supply the country.
Mr Sperling predicts the Australian dollar will fall below 70 US cents over the next six to nine months and says the Reserve Bank of Australia has room to further lower interest rates despite some risks to the residential property sector.
He also predicts the US Federal Reserve will increase interest rates once between September and December as US growth strengthens and added that the outlook for gold was uncertain amid headwinds for the precious metal.
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