Mining boom

No probs with opinion ... I just read Investigators post as "Olympic Dam not going ahead but all rosy with the rest of the country".

RIO is one of the bigger boys playing in this country - if they are doing serious cutbacks (which they are), and the money flowing in from their activities is halved, then perhaps it is all not currently rosy with the rest of the mining country.

Not something I'm willing to speculate on.
 
lizzie said:
No probs with opinion ... I just read Investigators post as "Olympic Dam not going ahead but all rosy with the rest of the country".

RIO is one of the bigger boys playing in this country - if they are doing serious cutbacks (which they are), and the money flowing in from their activities is halved, then perhaps it is all not currently rosy with the rest of the mining country.

Not something I'm willing to speculate on.
Click to expand...
EBITDA margin of coal is very different to EBITDA margin of iron ore.
 
Maybe someone should tell the people flocking to the west ...... we have recently had stories of people begging in the streets on the news here......its not something I have seen reported on before.

Is it because of lack of work in other states and people coming on the chance of work?
 
lizzie said:
Just to bring some reality to this discussion (hubby works in a professional status in a large RIO mine) ...

The new coal contract prices are being negotiated at half previous prices.

The cost to dig, wash, transport the coal has not decreased.

The difference between cost to produce and price received is nearly dollar for dollar - very little profit.

The RIO mine he works at has just cut $200mil from the spending budget. No jobs going (yet) but all projects are cancelled - and even small items such as domestic conference travel has been cut.

All management concentration is currently on how to increase productivity and reduce production costs.

I also know a private business owner who had a lot of contract work, and a very large team of workers, with Onesteel, and RIO only 6 months ago. Now he's forced to look at options completely away from mining and steel - there is no contracting work anymore.

So it's not just a few projects being cancelled - there is massive belt tightening happening at the existing sites.
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Excellent Post Lizzie.

Real experience, real people, real jobs...When this news filters to outside the mining world you will be vindicated.

I can add I have had a few very successful investment in Mining Companies.

I was at a private briefing 4 weeks back with I have one which has massive reserves but the CEO said plain to everyone, where they are and at the present price, they are staying in the ground. A lot is coal and with newer energy technologies coming it may never been taken out. On a purely economic basis that is money not being made. Luckily it is not all coal or I would be getting out.

FYI but I expect those here who seem to have no idea of economic value and business to argue, one comment does not mean a thing.

Regards, Peter 14.7
 
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I can vouch for Lizzie's comments as I am involved in the mining industry in a professional role and can say that budget cuts are coming in as we speak accross various commodities and not just in Australia.

There is many a project out there that was once profitable when the prices were high but now not looking so attractive. 62% iron fines are currently sitting at $108 ton, back in September 2011 it was at $177. Mining companies are notorious for wasting money and don't focus on efficiency when times are good. It will be a good time to clean out all the dead wood that's been hanging around until the next peak comes around.:D

There are layoffs happening now as well as projects that are near end of life being wound up early as the margin isn't there currently to get the remaining high cost to produce material out.

Contracting work is also drying up in some areas but that will pick up again as they will realise certain roles actually save money for companies by analysing business process, creating leaner systems that increase the margin without throwing man and machine at it for a quick fix.

It will be interesting to see if the high employee turnover eases in the short term, at times it can get up around 30-40%:eek:
 

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its all blown out of proportiion by the media as usual, last week the papers were saying its boom times. They have no idea.

Mining is definitely slowing, iron ore, coal etc.

But Gas is only just beginning. Pluto in Karratha has just finished with pluto 2 yet to be built, 3 LNG plants in Gladstone underway, Gorgan off the coast of karratha currently underconstruction, plus woodsides wheatstone in WA. Plus another LNG in darwin.

theres billions and billions of construction work coming up for the gas indursty , at least 5 years probably 10
 
EagerAchiever said:
I can vouch for Lizzie's comments as I am involved in the mining industry in a professional role and can say that budget cuts are coming in as we speak accross various commodities and not just in Australia.

There is many a project out there that was once profitable when the prices were high but now not looking so attractive. 62% iron fines are currently sitting at $108 ton, back in September 2011 it was at $177. Mining companies are notorious for wasting money and don't focus on efficiency when times are good. It will be a good time to clean out all the dead wood that's been hanging around until the next peak comes around.:D

There are layoffs happening now as well as projects that are near end of life being wound up early as the margin isn't there currently to get the remaining high cost to produce material out.

Contracting work is also drying up in some areas but that will pick up again as they will realise certain roles actually save money for companies by analysing business process, creating leaner systems that increase the margin without throwing man and machine at it for a quick fix.

It will be interesting to see if the high employee turnover eases in the short term, at times it can get up around 30-40%:eek:
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This really is crazy stuff, in WA companies are screaming for various trades and are looking/sponsoring overseas out of desperation.
I read your post and Lizzies and certainly got to raise concerns.

I have a friend who is in the process of developing a 10 unit site in Karratha area, I knew she got her timing wrong. I notice lots of properties on market in this area, wonder what is actually going on, timing is everything especially in mining towns.
 
Everything slowing in Mackay as well. Write up in last Saturday's paper about mining support companies laying off staff. I have talked to people in different fields around town, all say the same, slowed down last 4 months and even more so past 2 months.
Rents have now levelled out.

Uncertain times ahead.

Edit.
268 houses to rent in Moranbah, up from 250 three weeks ago and 230 weeks before that. A year ago there was nothing to rent in town.
 
Vmay

Maybe someone should tell the people flocking to the west ...... we have recently had stories of people begging in the streets on the news here......its not something I have seen reported on before.

Is it because of lack of work in other states and people coming on the chance of work?
Click to expand...

Often wonder about all those Eastern staters......particularly as I'm one of them....:rolleyes:

So other than rotating FIFO bottoms on seats, and according to an article I was reading the other day (WA Today??).........population growth for WA is roughly 38% homegrown:)eek:),57% imported and only 2.5% is interstate migration. I know it doesn't total absolutely...but I'm sure you get the idea.

So would probably be better telling all the poms and long clouders...rather than looking east....:)

Lizzie,

Kudos. Tell hubby to keep his head down. I was with Aunty RIO for 10 years and as a contractor for a further 4 year period during the 2008-2009 GFC. Admittedly this time around they aren't carrying a 40 Billion debt (Alcan)........but believe me they can slash and burn better than anybody........EPCM work ain't no protection either. It is something of an urban myth that mining saved the country during the GFC. As an example - approximately 500 people vacated head office during late 2008......and the EPCMS(Calibre, SKM, FD...etc,etc) put off thousands of contract staff........and it didn't even make the news.


Oh.......and don't bother coming to Victoria either (particularly if you're a sparky) I fight the good fight every day to keep my guys going...but still the numbers are slowly dwindling....:(

Ciao

Nor
 
Newcastle Port Terminal 4 has been postphoned by 2 years.
Reason being coal companies holding back on project.

Then again...there are still 25-30 ships waiting to load coal
 
Mr T said:
Newcastle Port Terminal 4 has been postphoned by 2 years.
Reason being coal companies holding back on project.

Then again...there are still 25-30 ships waiting to load coal
Click to expand...

But again, that is money not being spent now, when it appears we are close to going into recession. We need the spending.

The East Coast is really sick. If Mining and QLD is goes quiet then we will go into a recession.

Interests rates will drop, Aussie will drop, but what good is that if you have no work. THis thread should be essential reading as it is a head up on what is going to be reported in 3 month time.

I can add that Virgin is do special prices for SYD to MEL to rates I have not seems for 2 years since Borghetti took over. The only do this if they have very low advance booking as it can be up to 9 months ahead to get the cheaper rate.

This is not related to the fight with Qantas in case you thought that although they have been doing one off half price business class which is directly at Qantas.

I can also add we booked Eithad for two to Paris in five weeks ( second honeymoon) all via points: no cash. And we can upgrade to business class on the day for as little as $800 per leg. Again, if the seats were full they would not be offering these deals.

Keep the feedback: good and bad coming!

Regards Peter 14.7
 
Anybody know exactly what happened at Fast JV yesterday? I've heard some rumours but would love to read something solid.
 
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Digging a bit deeper, but there were about $175B worth of committed/under construction projects with about another $250B at earlier stages of planning/design.

So what is being said now is that there's STILL about $175B worth of projects committed/under construction and ONLY ( :D ) about $200B of projects in the pipeline??????

WOW, the boom has ended. :confused:
 
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