Welcome Guest [Log In] [Register]


Reply
  • Pages:
  • 1
  • 5
  • 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 (5,235 Views)
Jimbo
Member Avatar


skamy
20 Aug 2014, 10:33 PM
Here are another two good news stories for big Perth based companies

I think you are missing the point.

Mining company profits do little to create wealth for WA in general. The profits go to shareholders. WA gets a royalty, but falling prices have slashed that and left a big hole in WA's budget.

During infrastructure investment, a lot of jobs are created and because of the sudden upsurge in demand for skilled workers, wages climb to well above normal levels. This is not just within mining either. Every sector has to raise pay levels to keep or attract new workers.

This pushes up prices for everything as business wages costs are recovered from consumers.

That is why a pint of beer in Perth is $13 and a simple cooked breakfast $20.

It is why Perth has one of the highest costs of living of any city in the world.

It stands to reason that as mining infrastructure spending subsides, so will the knock on effects. Wage reduction will be across all sectors as they will no longer be competing against the big miners for workers.

It is not about how much profit BHP,FMG or Woodside make. It is about how much they spend in WA and that is going to decline.
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
 
Perthite
Member Avatar


skamy
20 Aug 2014, 10:41 PM
Gina Rinehart is giving the big US companies like Chevron a lesson in constructing in Australia. Roy Hill is going great guns it seems.

Looks like another rate cut on the cards.

Cutting growth forecast does not make a recession. WA is doing just fine there will be no crash.
Mining town are crashing are they not?

They are in WA are they not?
Port Hedland down 36%.

I'd say that boat has sailed.
Edited by Perthite, 20 Aug 2014, 11:05 PM.
Profile "REPLY WITH QUOTE" Go to top
 
newjez
Member Avatar


Perthite
20 Aug 2014, 11:00 PM
Mining town are crashing are they not?

They are in WA are they not?
Shares down heavily. 4% according to smh. 8 bill of their value. Oh dear. I'd hate to see some bad news skamy!
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
 
skamy
Member Avatar


Jimbo
20 Aug 2014, 10:54 PM
I think you are missing the point.

Mining company profits do little to create wealth for WA in general. The profits go to shareholders. WA gets a royalty, but falling prices have slashed that and left a big hole in WA's budget.

During infrastructure investment, a lot of jobs are created and because of the sudden upsurge in demand for skilled workers, wages climb to well above normal levels. This is not just within mining either. Every sector has to raise pay levels to keep or attract new workers.

This pushes up prices for everything as business wages costs are recovered from consumers.

That is why a pint of beer in Perth is $13 and a simple cooked breakfast $20.

It is why Perth has one of the highest costs of living of any city in the world.

It stands to reason that as mining infrastructure spending subsides, so will the knock on effects. Wage reduction will be across all sectors as they will no longer be competing against the big miners for workers.

It is not about how much profit BHP,FMG or Woodside make. It is about how much they spend in WA and that is going to decline.
Australians are big shareholders in Fortescue and in BHP and in Woodside and profits for these companies increase the wealth of Australians more than they increase the wealth of anybody else.


Look at Roy Hill for instance, at the peak of construction 4000 will be employed but for much of the construction that will be around 2000. The mine when it opens will employ 2000 operational workers for 15 years.
The mine will produce 55m tons of ore and we get royalties on that and taxes on the profits (minimised :) ) that is income for the governments that was not there prior.


Perth bears try to make that look like a bad news story.


http://www.abc.net.au/news/2014-03-14/roy-hill-hiring-at-iron-ore-mine/5321420


http://www.royhill.com.au/content/project

IMHO you should watch your selected market carefully Jimbo, they are already heavily discounted, 40% down from 7 year old prices. I think you have a great location and have definitely got a highly discounted market. However, Perth is seeing a lot of good news stories so you have got to ask yourself will you really see more falls from here?


And in other good WA news
http://www.miningaustralia.com.au/news/new-oil-discovery-off-port-hedland

Some bears just cannot see the big picture.


Edited by skamy, 20 Aug 2014, 11:24 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
20 Aug 2014, 11:17 PM
Australians are big shareholders in Fortescue and in BHP and in Woodside and profits for these companies increase the wealth of Australians more than they increase the wealth of anybody else.

Look at Roy Hill for instance, at the peak of construction 4000 will be employed but for much of the construction that will be around 2000. The mine when it opens will employ 2000 operational workers for 15 years.
The mine will produce 55m tons of ore and we get royalties on that and taxes on the profits (minimised :) ) that is income for the governments that was not there prior.


But there is already a downturn in resource construction requirements. I am on the ground so to speak and already, rates for some trades are beginning to fall as lucrative FIFO work completes and more of these people find themselves looking for work in Perth.

I will buy back in when the market either bottoms out or looks like it might get away from it me.

At the moment, prices locally are on a slow downward trajectory and rental vacancy rates are trending upwards.

As long as that is the case, I will stay out.
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
 
SittingOnDeFence
Default APF Avatar


skamy
20 Aug 2014, 11:17 PM
Australians are big shareholders in Fortescue and in BHP and in Woodside and profits for these companies increase the wealth of Australians more than they increase the wealth of anybody else.


Look at Roy Hill for instance, at the peak of construction 4000 will be employed but for much of the construction that will be around 2000. The mine when it opens will employ 2000 operational workers for 15 years.
The mine will produce 55m tons of ore and we get royalties on that and taxes on the profits (minimised :) ) that is income for the governments that was not there prior.


Perth bears try to make that look like a bad news story.


http://www.abc.net.au/news/2014-03-14/roy-hill-hiring-at-iron-ore-mine/5321420


http://www.royhill.com.au/content/project

IMHO you should watch your selected market carefully Jimbo, they are already heavily discounted, 40% down from 7 year old prices. I think you have a great location and have definitely got a highly discounted market. However, Perth is seeing a lot of good news stories so you have got to ask yourself will you really see more falls from here?


And in other good WA news
http://www.miningaustralia.com.au/news/new-oil-discovery-off-port-hedland

Some bears just cannot see the big picture.

How many years have you worked in mining?
Profile "REPLY WITH QUOTE" Go to top
 
Perthite
Member Avatar


Jimbo
20 Aug 2014, 11:48 PM
But there is already a downturn in resource construction requirements. I am on the ground so to speak and already, rates for some trades are beginning to fall as lucrative FIFO work completes and more of these people find themselves looking for work in Perth.

I will buy back in when the market either bottoms out or looks like it might get away from it me.

At the moment, prices locally are on a slow downward trajectory and rental vacancy rates are trending upwards.

As long as that is the case, I will stay out.
And I thought there would be blood in the streets before the unions copped pay cuts.

I was wrong on that one... :lol
Profile "REPLY WITH QUOTE" Go to top
 
newjez
Member Avatar


Jimbo
20 Aug 2014, 11:48 PM
But there is already a downturn in resource construction requirements. I am on the ground so to speak and already, rates for some trades are beginning to fall as lucrative FIFO work completes and more of these people find themselves looking for work in Perth.

I will buy back in when the market either bottoms out or looks like it might get away from it me.

At the moment, prices locally are on a slow downward trajectory and rental vacancy rates are trending upwards.

As long as that is the case, I will stay out.
http://www.miningaustralia.com.au/news/foreign-ownership-dominates-mining-industry-rba

http://www.theguardian.com/commentisfree/2014/feb/19/mining-tax-its-time-for-all-australians-to-realise-they-are-being-ripped-off

God you talk a load of shit skamy. Utter lies. Just as well I have you on ignore. Just wish people would stop quoting you. You're not worth quoting.
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:
 
It is not about how much profit BHP,FMG or Woodside make. It is about how much they spend in WA and that is going to decline.


There it is in a nutshell.
Quote:
 
As for construction yes it has its benefits but it is limited. Short time span, much of the items bought for construction are purchased over seas. The RBA even admitted recently it over estimated the impact of the mining construction boom and made mistakes raising interest rates to high in 2010/11. We just don't get the economic benefit flow through as much as we thought we would. The data proves this which you can find at the RBA, ABS.


I agree to an extent Mike but the problem that the interest rate rises should have highlighted was not so much that mining benefits were less than expected but that a very big growth driver - private sector credit growth - had stopped accelerating. And that a second, temporary large driver - the huge fiscal stimulus - was being withdrawn. It has demonstrated that despite the enormous size of this investment boom, mining cannot carry the economy by itself.

We can't look at what a driver such as mining investment is doing in isolation of the other main drivers - how much it rises or falls relative to how much the others rise or fall simultaneously is the story we are interested in.

I think it's difficult to quantify the exact flow-on mining investment creates job-wise. Mining may be only 2-3% of the labour force but how many jobs have come into existence over the past decade as a result of endlessly booming cash flow into the economy via this channel? Have a look at what happened when credit growth stopped accelerating and the fiscal stimulus was withdrawn....employment all but stopped growing.

It is the flow of spending that creates and maintains jobs and if mining's contribution is going to fall dramatically then other sectors must take up that amount of slack if there is to be no negative effect. Governments both federal and state are beholden to the surplus fetish so I doubt we'll see much help from them - taxes and royalties derived from increased mining output are useless to us if they are locked away instead of spent. That leaves only private credit growth which is still flat. The only driver I can see to take the baton is a resumption of increasing private leverage. So I tend to think ZIRP is probably on the horizon somewhere.

But given that monetary policy just can't go much lower than what we have now - what then?
Edited by Lef-tee, 21 Aug 2014, 07:12 AM.
Profile "REPLY WITH QUOTE" Go to top
 
newjez
Member Avatar


Lef-tee
21 Aug 2014, 06:48 AM


There it is in a nutshell.



I agree to an extent Mike but the problem that the interest rate rises should have highlighted was not so much that mining benefits were less than expected but that a very big growth driver - private sector credit growth - had stopped accelerating. And that a second, temporary large driver - the huge fiscal stimulus - was being withdrawn. It has demonstrated that despite the enormous size of this investment boom, mining cannot carry the economy by itself.

We can't look at what a driver such as mining investment is doing in isolation of the other main drivers - how much it rises or falls relative to how much the others rise or fall simultaneously is the story we are interested in.

I think it's difficult to quantify the exact flow-on mining investment creates job-wise. Mining may be only 2-3% of the labour force but how many jobs have come into existence over the past decade as a result of endlessly booming cash flow into the economy via this channel? Have a look at what happened when credit growth stopped accelerating and the fiscal stimulus was withdrawn....employment all but stopped growing.

It is the flow of spending that creates and maintains jobs and if mining's contribution is going to fall dramatically then other sectors must take up that amount of slack if there is to be no negative effect. Governments both federal and state are beholden to the surplus fetish so I doubt we'll see much help from them - taxes and royalties derived from increased mining output are useless to us if they are locked away instead of spent. That leaves only private credit growth which is still flat. The only driver I can see to take the baton is a resumption of increasing private leverage. So I tend to think ZIRP is probably on the horizon somewhere.

But given that monetary policy just can't go much lower than what we have now - what then?
I think the major players may have decided that the disadvantages of dropping rates out way the advantages. Without rate cuts, and the possibility of rate rises, I see no way forward. It's as if house prices are being used to flog the nation.
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
 
1 user reading this topic (1 Guest and 0 Anonymous)
ZetaBoards - Free Forum Hosting
Join the millions that use us for their forum communities. Create your own forum today.
Learn More · Sign-up Now
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply
  • Pages:
  • 1
  • 5
  • 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