Welcome Guest [Log In] [Register]


Reply
  • Pages:
  • 1
  • 2
  • 7
BHP set for bumper FY profit; Oh what's this? a good news story for mining
Topic Started: 18 Aug 2014, 12:17 PM (5,238 Views)
Lef-tee
Default APF Avatar


stinkbug
19 Aug 2014, 09:54 AM
I'd expect to see a number of years of big profits from the miners. The big mines are well on the way to being built, there are fewer high cost staff being employed and volumes are rising (albeit at lower $ per unit mined).

This was always going to happen. For people riding the big wave of mining employment the idea was to make money, save/invest in something, then take it a bit easier once it was over. A few people have probably managed that, but I suspect quite a few won't have.
Exactly stinkbug. After an unprecedented, decade-long mining investment boom in which wages were bid up to extrordinary levels there should be a lot of mining workers sitting pretty right now, owning a nice home and everything else outright. The wiser ones like Herbie have done so. But there are very many who have pegged their hopes on a never-ending investment boom and may be in strife before too long.

To my way of thinking, investment boom peak means just that, a peaking of activity before it falls away. I do not expect expect investment spending on mining to simply collapse from the current remarkable level to zero in the space of a few months. Even if mining investment collapsed by 50% overnight, tomorrow it would still be pumping more dollars into the economy than any other mining boom in history.

But it very likely will drift back to earth over the next few years and I am of the opionion that arguing that this will have no negative effect on both WA and the rest of Australia is an excercise in wishful thinking.
Profile "REPLY WITH QUOTE" Go to top
 
skamy
Member Avatar


Lef-tee
19 Aug 2014, 06:52 AM
What you fail to acknowledge is that I have used the words "mining investment boom" more times than I can recall and pointed out endlessly that it is just that. Investment booms require a great deal of boots on the ground to get the job done. When the investment boom ends most of those boots are no longer required and the money that is made churning out dirt belongs largely to foreigners.

You do understand the concept don't you? Investment booms pump large sums of money into the local economy, mining exports less so.

And unlike you, I ignore nothing - the investment boom is still charging on in the most vital area for employment and the local economy - that is, in mining construction-related areas. Although it is probably right on the cusp. Much of the drop off in investment dollars thus far has been in the purchase of imported machinery and equipment, there are few jobs to be either gained or lost in that.

We can talk about the unemployment rate in a couple of years (if government fails to do anything) though I suspect you will no longer be here.

I think there might be plenty more such payments to come yet.
Leftee it is obvious that construction workers are required during the investment boom.

It is more subtle to acknowledge that this construction work happened during a downturn in general construction which is now in recovery. Another fact is that mining construction was not that good for Australian companies who underpriced for work during the downturn and many companies such a Leightons and John Holland hemorrhaged losses on these projects. Add to this the fact that much of the profitable construction went to big US companies who took profits out of the country. Add to this the fact that many of the jobs with the big incomes were 457s and East coasters who took their money and now themselves home.

Building infrastructure and residential is much more beneficial for GDP. Also export earning are much better for GDP, they increase State and Federal income from royalties and the Feds gaining GST distribution. Our super funds and Australians generally are heavily invested in our big miners, all these people will do well with these export results. This then has knock on positive effects on the retail, finance and service industries

I am inviting you to look beyond the simplistic bear analysis which says operational mining employs less people than mine construction therefore there will be an employment downturn.

What is happening at the moment in WA is that there is a slowdown in mining construction, there are very few contracts around to tender for, and many itinerant workers have returned home. However, for locals there are loads of projects such as the stadium, new railways new schools, hospitals, lots of residential eg Rivervale, Riverside etc which will be going out to Tender in the next few months. If you couple this with the record number of new home builds on the books, you would have to have rocks in your head if you think there will be a downturn in employment in WA next year. It is just not gonna happen.

Spend 5 mins looking at potential oil, gas and mining opportunities in WA and combine this with agriculture, wine and future tourism potential and you will be hard pushed to see a dark cloud on the horizon for the next 10 years for this State.

That my friend is research.

Your position is to assume no other parts of the economy will recover from the GFC contracted economy, and all that is involved is a swop from lots of jobs in mining construction to a few jobs in mining. That is simplistic Leftee and very misleading.


goldbug
19 Aug 2014, 09:30 AM
Idiot! It was an investment in a hole in the ground, the money earnt by workers and revenues collected by taxes could have been used as an investment for the state but for the most part they were pissed up against the wall. Certainly most of the wages were, wasted on fast living and dubious real estate purchases. Similarly the taxes were squandered. If they hadn't been the state wouldn't be in the state it now is. Broke!

Now all that is happening is big profits to the owners and controllers of BHP and the few personel still working for them.

As for the MORE JOBS created. They are no doubt low wage part time jobs being created. That's the trend now. A manager gets sacked from a $150k job and 2 part time workers at wollies on $22/h get hired. Wake up to the truth scammy, clear that shit out of your scull and face the truth. All your lies have done nothing to hold up Perth re prices, nor rents.
That is a load of made up rubbish Goldbug. Money was not spent on real estate there was a massive downturn in RA. Money was not pissed againt the wall. Go visit the mines and you will see what the money was spent on.

The employment figures show the opposite more full time jobs and greater participation.

You can do better that this Goldbug that post was a fantasy of nonsense.
John Frum
19 Aug 2014, 09:47 AM
Aww another baby boy spitting the dummy. One gold miner writing off losses does not crash an economy anywhere other than in your dreams.

Do you know anything at all about Perth? I know for a fact that at the moment there are people getting very nervous about finding workers for current construction projects.
SittingOnDeFence
19 Aug 2014, 10:18 AM
How many people did BHP lay off this year?
Go look it up you will be surprised. You will find a few newspaper reports on a consultancy report suggesting 3000 losses many of whom were contract workers due to move on anyway. Actual reports of job losses are actually much smaller, check it out.

If big companies were sacking at the rates reported in alarmist newspaper articles unemployment would be growing and it is not. Were these newspaper articles released at wage negotiation time of the year? BHP like to get all their employees in halls and keep them on their toes with stuff like this. If the unions are trying to avoid job losses then they are not pushing higher wages. Take a look at this report from 2012
http://news.smh.com.au/breaking-news-business/bhp-set-to-cut-iron-ore-jobs-20121009-27avy.html

What volumes of iron ore were produced then compared to now? What actually happened to BHP jobs between 2012 and 2013? below is from the annual report
three financial years is as follows:
Year ended -30 June ---2013 -----2012 --------2011
Employees- ----------49,496 ----46,370 -----40,757
Contractors ----------79,330 ----78,813 -----64,548
Total ----------128,826--- 125,183 ----105,305

Edited by skamy, 19 Aug 2014, 05:17 PM.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Profile "REPLY WITH QUOTE" Go to top
 
Jimbo
Member Avatar


skamy
19 Aug 2014, 04:12 PM
Add to this the fact that many of the jobs with the big incomes were 457s and East coasters who took their money and now themselves home.

This would help explain the increasing rental vacancies.

Also, when people decide to emigrate to a place like WA, they don't tend to come when there is talk of a downturn.
skamy
19 Aug 2014, 04:12 PM
What is happening at the moment in WA is that there is a slowdown in mining construction, there are very few contracts around to tender for, and many itinerant workers have returned home. However, for locals there are loads of projects such as the stadium, new railways new schools, hospitals, lots of residential eg Rivervale, Riverside etc which will be going out to Tender in the next few months. If you couple this with the record number of new home builds on the books, you would have to have rocks in your head if you think there will be a downturn in employment in WA next year. It is just not gonna happen.

But there will be an increase in housing supply just when population increase rates are falling.
Edited by Jimbo, 19 Aug 2014, 06:29 PM.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
Profile "REPLY WITH QUOTE" Go to top
 
skamy
Member Avatar


Jimbo
19 Aug 2014, 06:27 PM
This would help explain the increasing rental vacancies.

Also, when people decide to emigrate to a place like WA, they don't tend to come when there is talk of a downturn.

But there will be an increase in housing supply just when population increase rates are falling.
Leftee population is growing, so we need increasing supply, it is happening and that you cannot deny. You are trying to say that slowing growth is equivalent to dropping population levels, it is not. The fact is that land is selling like hotcakes and prices are rising due to falling stocks.

The WA Economy is still growing at 4% just because it is not growing at 7% does not make this a bad news story. It is an enviable growth figure compounding several years of growth.

You guys jump on the rental market story as a drowning man clutches at straws. You fail to understand that it does not necessarily bring bad news. Why?

1. Rents were inflated by both the investment boom and the housing downturn, this was a boon for investors, now it is over big deal.

2. High end rents have fallen more than low end as the living away from home allowances were taken away last year.

3.Rental vacancy rates rise as new home building blossoms.

There is no significant negative overall economic effects from rents dropping back a bit after such phenomenal growth. Don't forget rents rose by 14% last year in Perth.

Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Profile "REPLY WITH QUOTE" Go to top
 
newjez
Member Avatar


Jimbo
19 Aug 2014, 06:27 PM
This would help explain the increasing rental vacancies.

Also, when people decide to emigrate to a place like WA, they don't tend to come when there is talk of a downturn.

But there will be an increase in housing supply just when population increase rates are falling.
I've never thought employment had anywhere near the effect as supply and demand. But It will slow immigration at a time when supply is inceasing. Perfect storm. Who would want to be a land lord in perth?
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Profile "REPLY WITH QUOTE" Go to top
 
East Coast Ripple
Unregistered

The question is - would a Perth drop affect the East Coast at all - or is it more likely that it will actually cause a mini-boom in Sydney/Melbourne as people get out of Perth and try get into Melbourne?
"REPLY WITH QUOTE" Go to top
 
newjez
Member Avatar


East Coast Ripple
19 Aug 2014, 07:09 PM
The question is - would a Perth drop affect the East Coast at all - or is it more likely that it will actually cause a mini-boom in Sydney/Melbourne as people get out of Perth and try get into Melbourne?
Isn't that already happening?
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Profile "REPLY WITH QUOTE" Go to top
 
newjez
Member Avatar


Its a shame Timmy had to lose his job to protect bhps profits. Still, he would have got a nice redundancy. Maybe he will pick up a cheap boat and 4wd and go bush.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Profile "REPLY WITH QUOTE" Go to top
 
Lef-tee
Default APF Avatar


Quote:
 
Your position is to assume no other parts of the economy will recover from the GFC contracted economy, and all that is involved is a swop from lots of jobs in mining construction to a few jobs in mining. That is simplistic Leftee and very misleading.


Well the economy did not actually contract during the GFC, barring a single quarter but that's another issue.

My position is far from simplistic skamy and if you observe honestly you will see the questions I have raised over a number of years being borne out. Not an opinion or a theory but actually happening now. We have had the peak of the greatest mining investment boom in all of history running simultaneous to the lowest interest rates in half a century following the mere briefest of growth blips during the GFC while most other modern economies more or less collapsed. These factors alone should be pushing growth that is white-hot with problematic inflation. Yet as I have constantly pointed out, the economy has remained largely lacklustre much of that time with interest rates looking increasingly unlikely to rise back to what was not so long ago considered normal for the forseeable future. You would need rocks in your head to deny these obvious facts. How is this possible? Why is it happening?

It is happening because despite the whopping contribution made by mining investment compared to any mining boom gone before, it has been unable to replace the loss of an even bigger contributer to the economy - the growth of credit in the private sector. Private sector credit growth has gone flat and with it the economy has lost much sparkle. Governments contribution made by the stimulus is gone.

Which brings me to the next point. All those things you mention are great skamy and they will help to some extent - but if you look honestly, you will see they all but pale into insignificance beside the gigantic sums currently being spent on mining investment construction.

You can argue that there will be a smooth handover from mining investment to these other factors but colour me skeptical - there will need to be a turbocharged boom in the things you mention in order to replace the sums of $$$ lost from the economy as mining investment fades over the next few years.

So my position is not one of "simplistic doom and gloom" but rather one of always trying to understand what is making things tick in the bigger picture. So far I seem to have been on the money regarding which direction the economy would go once the stimulus was removed and credit growth stopped accelerating. I hope you are right and I am wrong about what will happen as mining investment slides away.
Profile "REPLY WITH QUOTE" Go to top
 
Bardon
Default APF Avatar


I think that the reports of the death of the commodity cycle have been greatly exaggerated. The "once in a 100 years whatever" is also not entirely accurate. We had had many commodity peaks and lows over the last 100 years, which unsurprisingly align with the Kondratiev wave. Also if you follow this guys teachings then we are only half way up this 30 year rising market which started round about 1990. A mid cycle correction maybe, the death of commodities surely not.
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
ZetaBoards - Free Forum Hosting
Free Forums with no limits on posts or members.
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply
  • Pages:
  • 1
  • 2
  • 7



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy