BHP pulls out of Olympic Dam expansion

[Peter 14.7]

Sorry Peter but I dispute that will happen, ever. It didn't happen when Howard won his mandate for the GST - and I don't believe it will happen this time if TA wins, even with a landslide.

Actually we agree here. I dont think Labor or Greens will bring it.

As you reference: Like Howard threatened and the Democrats struck a deal. I think Labor and/or Greens will strike a deal so they can say "it was the best we could get and we saved the bits that matter". Very likely a deferral of the CT for 5 years with a review of all Climate Change option within 12 months" ironically what Gillard originally promised : re people convention.

But, one big but is:

Howard went to the people introducing a new tax and sacrificed the huge lead in seats he had in 1996 to bring it. He only just won and was in no positon to play really hard ball.

Abbott is going to the people removing a very unpopular (in the masses) tax. He will win in a landslide. He can play hardball and afford to lose a few colleague in house of reps along the way.

Politically he has all the cards, Peter

 

[Crabnet]

Abbott is going to the people removing a very unpopular (in the masses) tax. He will win in a landslide. He can play hardball and afford to lose a few colleague in house of reps along the way.

Politically he has all the cards, Peter

Realistically though removing the tax doesn't mean that prices will fall across the board unless they also legislate for a regime of price controls.

 

[eKwatee]

Doesn't seem to be.

http://www.propertyobserver.com.au/...erty-investors-much-terry-ryder/2012082256193

I would be spruiking the same message if I had invested heavily there too, both from a reputation & financial point of view.
I'm not convinced what he's now backing the growth for Whyalla will have any positive pricing effect at all. Allot of the projects he talks about are in the pending stage, or conditional. I've researched many of the areas he is talking about as there are what seems to be very affordable property for sale in those areas, but some are not likely to go ahead, or will only be employing a few people or be operational for a short time.

Now that Olympic Dam has been put on hold I think he got it wrong in the short-medium term.

I had 3 investors call me yesterday whom I work closely with, that after finding out the news are no longer looking to buy in Whyalla.

 

[jackbak]

With due respect this has already has had an immediate impact. Here is an excerpt from recent interview and a public statement from BHP:

BHP

"We want to find the right solution to unlock this resource," said Mr Kloppers.

However, BHP immediately began to lay off workers as it put the project on the backburner and as its existing underground mine cuts back because of lower commodity prices.

Read JOB going NOW. Means people getting the dole and not paying income tax.

THE THE SA LABOR PREMIER

South Australian Premier Jay Weatherill said the decision was an "enormous disappointment".

The indenture agreement between the South Australian Government and BHP will lapse on December 15, so any future mine expansion plan will need to be renegotiated, including the company's generous 45-year deal on royalties.
"The community will be expecting us to learn from our experience," Mr Weatherill said.

The expansion had been factored into the State Budget but Mr Weatherill said it was too early to quantify the loss to the SA economy.

Which is political speak for OMG it is so huge we have no idea.

Regards Peter 14.7

Read more: http://www.news.com.au/business/com...y-fnda1bsz-1226455884519#ixzz24KsdjmZErepsnet this has and immediate impact

This was a PROPOSED expansion, BHP was not even going to make their decision until December, if it did start at all it was due to start at the end of 2013 (it may not have even been in the '12-'13 financial year). It had been canned before. This project was 50/50 at best.

Again, I haven't read the budget, but I would be staggered if this was factored in. The only thing that may affect the SA governments budget (not the federal) would be the people working on the feasibility study that may now be put off, maybe 100 workers?

 

[Peter 14.7]

This was a PROPOSED expansion, BHP was not even going to make their decision until December, if it did start at all it was due to start at the end of 2013 (it may not have even been in the '12-'13 financial year). It had been canned before. This project was 50/50 at best.

Again, I haven't read the budget, but I would be staggered if this was factored in. The only thing that may affect the SA governments budget (not the federal) would be the people working on the feasibility study that may now be put off, maybe 100 workers?

I sorry but you are not right but we can leave it there and agree to disagree.

Regards Peter 14.7

 

[truong]

In one devastating blow, Swannie the fearless miner-bashing superhero has stopped the greedy profiteers on their track.

 

[HotRod]

In one devastating blow, Swannie the fearless miner-bashing superhero has stopped the greedy profiteers on their track.

Long live Swannie, the saviour of all workers' jobs.

May we be blessed with his far reaching forethought, oh wait.

 

[dan c]

I would be spruiking the same message if I had invested heavily there too, both from a reputation & financial point of view.
I'm not convinced what he's now backing the growth for Whyalla will have any positive pricing effect at all. Allot of the projects he talks about are in the pending stage, or conditional. I've researched many of the areas he is talking about as there are what seems to be very affordable property for sale in those areas, but some are not likely to go ahead, or will only be employing a few people or be operational for a short time.

Now that Olympic Dam has been put on hold I think he got it wrong in the short-medium term.

I had 3 investors call me yesterday whom I work closely with, that after finding out the news are no longer looking to buy in Whyalla.

Yeah, I agree with what you're saying. I would be of the same mindset as your investors.

 

[strongy1986]

The SA government need to pull their finger out and fast track the Port Bonython upgrade ( nothing to do with BHP). This is currently at the Environmental Impact Statement stage and the biggest threat to the project appears to be the local cuttlefish...

There are plenty of iron ore/ coal deposits in SA just waiting for an economical way to get to market.

I reckon its a case of build it and they will come. (this includes BHP whos only current option with the expansion was to rail it to Darwin)

 

[knightm]

Well I guess I should go on record and say "BUGGER".

My Andamooka place (held 4 yrs now) was a punt, and the dice have landed the wrong way for now. mmmm. how do i spell "opportunity cost"?. will be interesting to see what happens to the rental market out there and what happens inside my head re whether i think being patient or cashing in to recover and redeploy is the preferred option.

in the interest of thinking positively, I wont be relying on a cg windfall anytime soon from this so perhaps that will prevent laziness and I will work harder to produce far better productivity from projects in other areas.

 

[singingtheblues]

olympic dam

my take on things (as an owner of property up in 'the gutta')

BHP have been going cold on this deal for a while so it's not a great surprise - anyone buying up there before they formally pressed the button was taking a risk which they should have factored into the price they paid for their investment

its strange that BHP have pulled the plug - i dont believe the tax arguements as a reason - in a 100 year project you have to expect during that period you will encounter helpful & helpful tax rates, different governments, up & down commodity prices, boom & recession - in fact you might expect now as being the perfect time to go ahead given the low cost of capital - after all they will not be producing anything for 6 years & who knows what tax/government/price regime will be in place by then

my guess is that there are probably more lucrative/profitable projects elsewhere with an earlier return on capital & lower development costs - BHP need to protect their capital after a few dud investments & failed take overs - i dont think kloppers & the board can take the risk of a dnother dud investment

on the positive side even without the expansion there are still a host of other projects going on in the state & an already active mine at olympic dam

however the expansion would have been a game changer - the infrastructure BHP were going to put in could have completely changed the landscape up there opening the way for further spin off projects

there would have been a host of companies expecting to provide supporting activities & ancilary services to BHP who were gearing/skilling/peopling up in anticipation of the expansion - the future for these workers & maybe whole companies probably looks bleak

so what does it mean ..

i'd say the future will be stagnant - the losses in unrealised anticipatory activity will be picked up on other projects with no growth in the sector for the time being & property prices may come off a bit - some of the laid off will return to adelaide & get picked up in the current construction projects - hospital, southern expressway etc

adelaide will stay as it always has .. youngsters leaving to get a decent job then coming back to have a family & a long term job until they retire - once again you have to question what will be the driver of growth in SA - the government is fully committed & just about broke

looks like the SA government have backed the wrong horse .. why throw more money into the declining car industry when they could have been actively investing in infrastructure that might have encouraged BHP to press the button .. ie port facilities, desal plant up in the gulf etc

Bleak? maybe! .. but every dog has it's day ... SA will just have to wait a bit longer!!!

 

[lizzie]

The SA government need to pull their finger out and fast track the Port Bonython upgrade ( nothing to do with BHP). This is currently at the Environmental Impact Statement stage and the biggest threat to the project appears to be the local cuttlefish...

That project has been going on since before our Whyalla days - which was nearly 5 years ago (that long! ). Even then they were quibbling about the cuttlefish, so can't see anything happening soon.

 

[depreciator]

Gee, singingtheblues, that was a well reasoned and non hysterical assessment of the situation. I'm not sure this thread is the place for that sort of behaviour.

 

[Crabnet]

looks like the SA government have backed the wrong horse .. why throw more money into the declining car industry when they could have been actively investing in infrastructure that might have encouraged BHP to press the button .. ie port facilities, desal plant up in the gulf etc

Bleak? maybe! .. but every dog has it's day ... SA will just have to wait a bit longer!!!

I thought their intention was to transport the concentrate via rail to Darwin for processing in overseas smelters rather than building an extra smelter on site. This would require an expansion of existing storage and port facilities in Darwin if the project is approved in the future.

They want to mine using new technologies that would allow them to leach the minerals using brackish water so any particular desal plant requirement would be something for the future once the technology is decided.

 

[jackbak]

Gee, singingtheblues, that was a well reasoned and non hysterical assessment of the situation. I'm not sure this thread is the place for that sort of behaviour.

What was wrong with it? Looked ok to me.

 

[Brady]

What was wrong with it? Looked ok to me.

Haha he was saying that it was a good post

 

[topcropper]

What was wrong with it? Looked ok to me.

As with Brady, Depreciator was saying it was a good post.

Maybe it takes a while to get used to the humour and sarcasm some use here?


See ya's.

 

[Crabnet]

What was wrong with it? Looked ok to me.

It was a thinly veiled "This thread is full of unreasonable, hysterical partisans" post.

 

[jackbak]

As with Brady, Depreciator was saying it was a good post.

Maybe it takes a while to get used to the humour and sarcasm some use here?


See ya's.

Woops! Sorry, thought it was a bit strange!

 

[jackbak]

I sorry but you are not right but we can leave it there and agree to disagree.

Regards Peter 14.7

Would normally be happy to let it go Peter, but since you were so arrogant:

"However, economists said the Olympic Dam decision would not have a direct impact on economic growth or the federal budget this year."

http://afr.com/p/national/ferguson_sparks_labor_row_over_resources_68cOUB2KTtwMXXq7S6NMQN