# The Mining Boom is Over



## MrBurns (1 August 2012)

Compelling story on The Business last night - flick forward to 4.20 to see the certainty with which one commentator says "it's over" add Europe to this and it really looks like it's about to get rough.
Ther market will wake up to this soon and watch it dive then.

http://www.abc.net.au/iview/#/view/978673


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## Gringotts Bank (1 August 2012)

MrBurns said:


> Compelling story on The Business last night - flick forward to 4.20 to see the certainty with which one commentator says "it's over" add Europe to this and it really looks like it's about to get rough.
> Ther market will wake up to this soon and watch it dive then.
> 
> http://www.abc.net.au/iview/#/view/978673




Definitely over.  Something else will bloom... some other sector.


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## Crom (1 August 2012)

I don't agree.  Do you honestly think that China, India, Asia are going to stop growing?


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## CanOz (1 August 2012)

Crom said:


> I don't agree.  Do you honestly think that China, India, Asia are going to stop growing?




Agree, but....will the  demands still exist for years to come or will we settle into a normalized level of demand based on the typical boom / bust business cycle...?

Most of the voraciousness came from China's asset bubble. They're not interested in continued re-inflation, but a more consistent pace of development.

So yes i agree the boom is either over or coming to an end, hopefully to a more consistent, normal demand.

CanOz


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## MrBurns (1 August 2012)

CanOz said:


> So yes i agree the boom is either over or coming to an end, hopefully to a more consistent, normal demand.
> CanOz




Normal demand won't keep the AU economy afloat and we have nothing else up our sleeve, unless wool makes a big comeback


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## CanOz (1 August 2012)

MrBurns said:


> Normal demand won't keep the AU economy afloat and we have nothing else up our sleeve, unless wool makes a big comeback




Mining isn't the bulk of the economy from what I've read on here....Australia's political leaders need to have a vision for the future that can create a balanced economy. Good luck with that...

CanOz


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## MrBurns (1 August 2012)

CanOz said:


> Mining isn't the bulk of the economy from what I've read on here....Australia's political leaders need to have a vision for the future that can create a balanced economy. Good luck with that...




Cant expect them to look after us when they only have time for themselves:frown:


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## MrBurns (1 August 2012)

> Rio closing Sydney office, cutting jobs
> 
> Rio Tinto has confirmed it will close its Sydney office, and will also be cutting other support roles across the company.
> 
> ...





http://www.abc.net.au/news/2012-08-01/rio-tinto-closes-sydney-office-cuts-jobs/4169272


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## young-gun (1 August 2012)

Crom said:


> I don't agree.  Do you honestly think that China, India, Asia are going to stop growing?




Yes. 

We already know China is slowing, India appears to be also 

http://profit.ndtv.com/News/Article...h-slows-in-july-weakest-since-nov-2011-308663.

Growth won't stop(well in some cases it will and contraction will occur), but even if it slows heavily it would have huge impacts here at home. China hitting the brakes hard would be disastrous for us. And that's only a matter of time.


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## wayneL (1 August 2012)

Crom said:


> I don't agree.  Do you honestly think that China, India, Asia are going to stop growing?






CanOz said:


> Agree, but....will the  demands still exist for years to come or will we settle into a normalized level of demand based on the typical boom / bust business cycle...?
> 
> Most of the voraciousness came from China's asset bubble. They're not interested in continued re-inflation, but a more consistent pace of development.
> 
> ...




The business cycle will always assert itself... eventually.


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## Sean K (1 August 2012)

Looking forward to the Africa Boom! 

in the 2300s.


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## So_Cynical (1 August 2012)

No not over, its a lull in activity and a drop to more realistic prices...not over by a long way, this super cycle has at least 10 years to run.


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## outback (2 August 2012)

Well my money is going into tulips. I've got a hot tip from some mad dutch bloke.


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## springhill (2 August 2012)

There are always doomsayers and extreme bulls around. If they keep talking long enough, at some stage they will be right even if it is +/- 10 years from when they started flapping their trap, and then able to say 'Look at me, i told you so', which is invariably their main objective.


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## Timmy (2 August 2012)

springhill said:


> There are always doomsayers and extreme bulls around. If they keep talking long enough, at some stage they will be right even if it is +/- 10 years from when they started flapping their trap, and then able to say 'Look at me, i told you so', which is invariably their main objective.




Agree 100%. 
They are best ignored by traders. Or faded.


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## CanOz (2 August 2012)

Timmy said:


> Agree 100%.
> They are best ignored by traders. Or faded.




Then there is the other side....the "this boom will last forever, we have reached a permanently high plateau" ... things "are different this time"...

As Wayne says, "the business cycle will prevail"....the "return to mean"...

CanOz


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## Timmy (2 August 2012)

CanOz said:


> Then there is the other side....the "this boom will last forever, we have reached a permanently high plateau" ... things "are different this time"...




Think you have missed something Can:



springhill said:


> There are always doomsayers *and extreme bulls around*.




i.e. BOTH doomsayers and the "other side" are as bad as each other.
Ignore/fade BOTH ...


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## CanOz (2 August 2012)

Timmy said:


> Think you have missed something Can:
> 
> 
> 
> ...




oooh, yup agree...


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## Glen48 (2 August 2012)

Solves the problem of Gina importing slaves, Clive shipping coal up the Reef , Global warming and you forget we have some thing the rest of the World does not have and badly wants......Swanny.
 Maybe the boat people won't want to come now if there is hand outs all is taking a dive.
Wonder if Clive will go ahead with _Unsinkable 11 _​sounds like a bad decision to me.


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## moXJO (2 August 2012)

So_Cynical said:


> No not over, its a lull in activity and a drop to more realistic prices...not over by a long way, this super cycle has at least 10 years to run.




I agree.
Plus we are gearing up as Asia's food bowl. Plenty of ops to come


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## sinner (2 August 2012)

It'll never be the same again as the last 100 years without another massive influx of essentially free energy and huge jumps in technology.

EROEI is going down for all energy sources, this will have a huge impact, everyone assumes they can keep running their diggers and drillers for free forever. Exploration itself is massively energy intensive.

Plus

The USD is screwing with everything, including the global competetivenes of Australian good and services priced in AUD. Chinese demand might go up, or whatever, doesn't mean they have to buy from us. Plenty of sellers out there, not to mention the Chinese have been investing vast amounts of paper money into *real* resource assets in African and Sth America for at least a decade now.

My experience is that most people talking about the mining boom really have never researched Australias 'composition of trade', even cursorarily. 




You can see that for example, gold has replaced Education as our #3 in 2011. You can also see just how reliant on Iron-ore demand we really are.


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## MrBurns (2 August 2012)

I think it's certainly over at the level we're used to which means trouble for us.

I feel like our future will be a bit like our performance in the Olympics right now....


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## qldfrog (2 August 2012)

also want to add that we(Australia) have been providing a lot of the gap offer/supply for iron/coal in china, even a small decline in growth in China will see the Chinese able to turn into self sufficient, or just buy at low price:
 many miners will loose money and send at loss to the chinese mills but it will be less expensive than writing off the billions of capital invested;
we might end up having worse than a no export situation, one where every export will actually cost us....
scenario explained in the  AFR of this week end and similar to situation seen in the past;
as mentioned above, China has bought Africa which is in a mineral point of view a much luckier country than us so there is competition even if the boom continues: the new mines/expansions all over the world  will be up and running in a matter of months and start a glut IMO
Time will tell


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## DB008 (2 August 2012)

'Boom' could be over.

==However==

China/India still need 'iron ore/alumina/nickel' to build 'stuff' (buildings, rail, stainless steel products, etc..etc..)

The 'growth' sector in mining will slow down, no doubt, but demand will still be there after the 'slack/excess' has been sucked up. Might take a year or so, but iron ore will be in demand for a while. China still growing at 8% + is still pretty big, compared to the rest of the world.

Also, look at other mining assets/metals like R.E.E./R.E.Metals which are needed in iPads/iPods//Laptops/Missiles etc etc.....

Only iron ore miner l own is WPI. 
Digging up iron ore in Africa, which happens to be in a huge down-trend....sell sell sell....

DYOR - my thoughts are all BS anyways....


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## Smurf1976 (2 August 2012)

Markets are made at the margin.

Add 10% to supply whilst demand only grows 3% and that in itself will send the price through the floor unless there's some form of withholding of production in order to prop prices up. It only needs a fairly minor shift in balance to greatly alter the price - that's what sent them up in the first place and it works the other way around too.

Look at oil in 2008. Demand fell just a few % but price crashed 75% or so top to bottom. And oil's a far scarcer commodity than iron ore or coal in terms of reserves in the ground etc.


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## So_Cynical (2 August 2012)

DB008 said:


> Only *iron ore miner l own is WPI*.
> *Digging up iron ore in Africa*, which happens to be in a huge down-trend....sell sell sell....




I hate to be picky Danny but

Miners mine stuff and sell it...prospectors/explorers look for stuff and after they find it they spend lots of money developing etc.

WPI is a prospector and as such digs up very very little, NOT a miner.


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## Glen48 (3 August 2012)

Steel production is down 96% in China which could have slight impact on OZ.


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## wayneL (3 August 2012)

Glen48 said:


> Steel production is down 96% in China which could have slight impact on OZ.




Not quite.

Steel production PROFIT is down 96%. However still some concern for Aus producers http://online.wsj.com/article/SB10000872396390443545504577562883129133806.html


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## DB008 (3 August 2012)

So_Cynical said:


> I hate to be picky Danny but
> 
> Miners mine stuff and sell it...prospectors/explorers look for stuff and after they find it they spend lots of money developing etc.
> 
> WPI is a prospector and as such digs up very very little, NOT a miner.




Your right So_Cynical, l should have written 'prospector, looking to become a miner *maybe* in the future', LOL.


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## DB008 (3 August 2012)

2 Data points.


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## brty (3 August 2012)

If you want to know what is booming and what is in the bust phase, the simplest place to look is in the rolling year records of the ASX. It is available from the AFR website here...

http://www.afr.com/share_tables/;jsessionid=C0C71ADE39F69BE3792821A50DEDEDFA

A simple look at rolling year records this week shows new highs in such issues as CMJ, WBC, WOW, TLS, TTS, WDC etc.
Just yesterday the new yearly lows was full of names that had Resources, Res, Min, Energy, metals and coal in them.

There is always plenty to learn about the state of the market from those rolling year records.


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