GFC 2

[tinhat]

Just when things were seeming too quiet, the Greeks manage to pipe up again. Asking for a two year extension to their austerity targets, deferral of the repayments on the second IMF loan (they want to start repaying in 2020 not 2016). Greek MP to meet with Merkel and Hollande next week.

Perhaps there will be a correction before a northern hemisphere winter bull run? Whatever happens it will merely be warm-up to the US fiscal cliff that awaits early next year.

 

[numbercruncher]

I think this little snippet from BHP is an indication of the carnage that will sweep Australia

The world's biggest resources company is expected to post a fall in operating profit from an Australian record $US23.6 billion last year to about $US16.9 billion in 2011-12, but it may have to write down some shale gas assets.

 

[DB008]

Vale, in Brazil has also posted a huge profit downgrade....

 

[Glen48]

Ok move up a notch GFC 2.5

 

[tinhat]

And yet the market completely ignores the Greeks. I'm surprised. Then again, it's all about China if you look at the numbers.

 

[young-gun]

It ll all come to a head soon enough. I have no idea what the hell is going on at the moment

 

[lusk]

It ll all come to a head soon enough. I have no idea what the hell is going on at the moment

The gambling house doesn't think so.:boy:

 

[numbercruncher]

More players reminding Australia about her date with destiny .....

ONE of Europe's biggest banks today warned of the growing risk of recession in Australia in 2013, as prices for its key commodities such as iron ore and coal spiral lower.

The warning by Deutsche Bank comes amid rising concern that Australia's mining investment boom, which has insulated the commodity-rich economy from a global slowdown, is waning, leading to mine expansions being scaled back and mounting job losses.

 

[DB008]

Vale, in Brazil has also posted a huge profit downgrade....

http://www.marketwatch.com/story/vale-q2-profit-falls-59-on-lower-iron-ore-prices-2012-07-25

 

[Steve C]

More players reminding Australia about her date with destiny .....

ONE of Europe's biggest banks today warned of the growing risk of recession in Australia in 2013, as prices for its key commodities such as iron ore and coal spiral lower.

The warning by Deutsche Bank comes amid rising concern that Australia's mining investment boom, which has insulated the commodity-rich economy from a global slowdown, is waning, leading to mine expansions being scaled back and mounting job losses.

On the above note, I would like to take this opportunity to thank Prime Minister Gillard for introducing the carbon tax and MRRT as policies to combat any chance of a recession. With these well thought out policies now in full swing mining investment in Australia is bound to increase and gain momentum...

 

[So_Cynical]

http://www.marketwatch.com/story/vale-q2-profit-falls-59-on-lower-iron-ore-prices-2012-07-25

Wow a 59% drop in Q2 profit...from 6.5 billion to $2.66 billion, share holders must be crying into their gold plated corn flakes, what a disaster Vale mite only make 10 billion dollars profit this year...the world's gone to hell in a hand basket.

On the above note, I would like to take this opportunity to thank Prime Minister Gillard for introducing the carbon tax and MRRT as policies to combat any chance of a recession. With these well thought out policies now in full swing mining investment in Australia is bound to increase and gain momentum...

Yep its got alot to do with the profitability of mine development in Aust you have 15 threads to bash and vent all the right wing political clap trap you like...how about posting it where its appropriate.

 

[Steve C]

Yep its got alot to do with the profitability of mine development in Aust you have 15 threads to bash and vent all the right wing political clap trap you like...how about posting it where its appropriate.

Have you thought about foreign investment? Diminishing margins due to increased costs (ie. taxes) Do you realise that because of these policies mining companies are looking to Africa and South America taking money out of Australia? Even local miners are looking at developing assets overseas because all the taxes and red tape has made it to expensive to do business in Australia.

 

[So_Cynical]

Have you heard of foreign investment? Do you realise that because of these policies mining companies are looking to Africa and South America taking money out of Australia? Even local miners are looking at developing assets overseas because all the taxes and red tape has made it to expensive to do business in Australia.

Bollocks.

-----------------------

Miners dig up stuff and sell it, now in order to do that they have to operate where the stuff is..and we got the stuff.

Cant get around that.

 

[Steve C]

Bollocks.

-----------------------

Miners dig up stuff and sell it, now in order to do that they have to operate where the stuff is..and we got the stuff.

Cant get around that.

I work in mining consulting - believe me it's happening, Africa and South America are also commodity rich without blatent money grabbing Government policies.

An example - a certain mid cap iron ore miner will be forced to pay $5 million annually under the carbon pricing regime even though they are not directly liable (indirect costs such as diesel) do you realise how much that squeezes margins for a mid cap?? They wouldn't get that in chile or brazil...which is why many are looking at overseas investment.

They aren't going to dig the stuff up and sell it when it stops being profitable enough to do so.

 

[So_Cynical]

I work in mining consulting - believe me it's happening, Africa and South America are also commodity rich without blatent money grabbing Government policies.

An example - a certain mid cap iron ore miner will be forced to pay $5 million annually under the carbon pricing regime even though they are not directly liable (indirect costs such as diesel) do you realise how much that squeezes margins, they wouldn't get that in chile or brazil...which is why many are looking at overseas investment

Yep its all happening in Africa, there is alot of copper in the DRC and i have heard that the rebels don't charge as much tax as the Govt...also see on the news that the police in SA are very pro active in Platinum Mine security apparently Indonesian joint venture partners are also no risk to partner with.

Billions waiting to be invested in bougainville as well...a world of Carbon/super profits tax free opportunity awaits.

 

[Steve C]

Yep its all happening in Africa, there is alot of copper in the DRC and i have heard that the rebels don't charge as much tax as the Govt...also see on the news that the police in SA are very pro active in Platinum Mine security apparently Indonesian joint venture partners are also no risk to partner with.

Billions waiting to be invested in bougainville as well...a world of Carbon/super profits tax free opportunity awaits.

Great you read the AFR... I notice no South American references and for the few African mines you refer to there are 200 others experiencing no such issues....sovereign risk vs costs... Once the costs mean no profits then other opportunities will be looked at elsewhere.

Of course I am not claiming the costs are all attributed to labor policy, of course lower Chinese demand, commodity prices, labour costs and Europe play a large part in this potential recession mentioned in the news article but I am giving you first hand information that I am hearing from C Level Mid tier mining execs.

 

[DB008]

So_Cynical - Just putting a picture out there iron prices are cooling off. On top of that, miners are still ramping up production. BHP did the massive RGP stage project (Quantum Projects still on hold), Rio also expanded Hope Downs (production output) and FMG got Cloudbreak and Christmass Creek up and running with the Solomon Hub also getting under way. These are huge projects.

Lets also not forget that the price of Iron Ore was sub $20 for a very long time, then jumped to ten fold (at peak) in a very short space of time. Equals a boom.



As Steve C says, for a variety of reasons (China slowing down, global uncertainty, carbon tax, MRRT), there has been caution in the wind in the resources sector with major projects been put on hold. I am hearing this too from first hand sources. There is a definite cooling down happening.

BHP's multi-Billion Dollar Ravensthorpe Nickel Project also suffered some pretty big cost blow-outs and there was a significant drop in the price of Nickel, which led to the mine closing there for a while. And that was a company with very deep pockets. I wonder how smaller operators are going to take the next few years.





Source/Links
http://www.indexmundi.com/commodities/?commodity=iron-ore&months=120
http://www.blue-point-trading.com/blue-point-trading-market-view-june-06-2012
http://www.kitcometals.com/charts/nickel_historical_large.html#5years
http://en.wikipedia.org/wiki/Ravensthorpe_Nickel_Mine

 

[stacks]

Yep its all happening in Africa, there is alot of copper in the DRC and i have heard that the rebels don't charge as much tax as the Govt...also see on the news that the police in SA are very pro active in Platinum Mine security apparently Indonesian joint venture partners are also no risk to partner with.

Billions waiting to be invested in bougainville as well...a world of Carbon/super profits tax free opportunity awaits.

Lots of sarcasm and rolling eyes but little recognition of what is unfolding on the ground

 

[young-gun]

Is it just me or has everything gone strangely quiet recently?? Seems as though either there is lack of news to report on out of Europe or they aren't reporting it. And yet markets, well at least the Dow and the asx seem to be furthering their little rallies. Calm before the storm perhaps??

 

[tinhat]

Is it just me or has everything gone strangely quiet recently?? Seems as though either there is lack of news to report on out of Europe or they aren't reporting it. And yet markets, well at least the Dow and the asx seem to be furthering their little rallies. Calm before the storm perhaps??

Europeans go on holidays during August.