I read one big mine in Zeehan Tas has just closed down – last few weeks.
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Agreed with Crashy. This warning comes 2 years too late Steve…
There were others ( including me ) who said this would happen over a year ago.
We even explained why it would happen and how long it would take before we would see the results.
Our warning came 1 year ago and predicted this thing to the exact month ( January 2009 ).herbpeterson wrote:I doubt mining companies will close and walk away from massive resources (that they can't take with them)for very long. People don't seem to consider it is also an investment for the company, you can't easily liquidate the resources,
and buy something down the road.
this is the biggest misconception about mines. people assume that because they pull the stuff out of the ground it costs them nothing, when the reality is the costing of mining the resource is often more than the base price. Also demand is often irregular but staff & machinery must be keep operating regardless of whether there is work or not.
so YES, mines do and have closed frequently in the past and certainly will now that we are entering a depression.
I think its unfair to jump down Steve's throught. Yeah sure many predicted this( As you seem so happy to keep reminding us). But exactly how many predictions have been thrown around over the last 12 months.Fuel prices,gold prices,interest rates.Many many people have been wrong. Sure some may be burnt by the recent mining slump but how many have actually made a fortune.Steve only gives out his ideas on the information at hand. its up to the individual to do the DD and therefore see if the risk is worth the reward. After all we have all being told of the risk in mining towns.
I agree Devo76,
The point is any person can predict the winner of a horse race when it's finished.
Every now and then WE all need to put up our hands and say opps nobody is perfect and Steve has done lots of great things and many mistakes like all of us, we're all human even Packer made mistakes.
Let he who has not sinned throw the first stone …
D
BHP Billiton recently laid off 200 workers from its Roxby Downs uranium mine, and the price of uranium in the past 18 months fell from 160 to $US55 a pound.
Roxby Downs stands out clearly to me as i was amazed at such a thriving town in the middle of a nowhere (visiting over a year ago).
But it was the only town where i seen signs all over the real estate agencies "Vacancy Rate 0". I just did a quick search of rentals at RealEstate.com and found 25 rentals now.
I bet thier is a shuffle around going on for cheaper rental places with the existing tenants.
wealth4life.com wrote:I agree Devo76,The point is any person can predict the winner of a horse race when it's finished.
Every now and then WE all need to put up our hands and say opps nobody is perfect and Steve has done lots of great things and many mistakes like all of us, we're all human even Packer made mistakes.
Let he who has not sinned throw the first stone …
D
This wasn't a horse race.
Though Steve would have had no idea when this crash would come, I bet he knew that the investment strategies of the past decade were unsustainable and the same for Australia's commodity boom.
ummester wrote:wealth4life.com wrote:I agree Devo76,The point is any person can predict the winner of a horse race when it's finished.
Every now and then WE all need to put up our hands and say opps nobody is perfect and Steve has done lots of great things and many mistakes like all of us, we're all human even Packer made mistakes.
Let he who has not sinned throw the first stone …
D
This wasn't a horse race.
Though Steve would have had no idea when this crash would come, I bet he knew that the investment strategies of the past decade were unsustainable and the same for Australia's commodity boom.
And if he told everyone a decade ago that it was unsustainable and a correction was coming, quick get out. How many would have missed out on the massive gains in this time. RISK/REWARD. Its up to the individual to decide what ratio they want the mix in.
I locked my interest rate in at just under 8 % some time back because EVERYBODY SAID THEY WERE GOING OVER 10%. What are they at now.
I dont blame anyone for that. I made the decision to lock based on the information i had. In the end thats what everyone should do.devo76 wrote:And if he told everyone a decade ago that it was unsustainable and a correction was coming, quick get out. How many would have missed out on the massive gains in this time. RISK/REWARD. Its up to the individual to decide what ratio they want the mix in.True, but there would be no bubble either and the economy would be stable.
I don't mind people taking risks with their money but the extent of the risk and the amount of people taking them over the last 10 years have had an adverse effect on the finances of those that would prefer to play it safe. That isn't fair.
I agree about the bubble. But ithink there is no way we could ever stop a boom or bubble from happening. The boom/bust cycle just keeps on happening over and over. I think its human nature that plays a big part. The sheep in us just start following and the end result is the massive swings that form cycles. And im sure the boys at the top want it to continue. There is a lot of money to be made in a short time during booms. This is when the rich get richer and the poor get f#@ed over. It might not be right but i cant see it changing. This is why a long term view ( 20 years at least) for investing will still pay off. It smooths over the lumps and bumps with less risk.
crashy wrote:herbpeterson wrote:I doubt mining companies will close and walk away from massive resources (that they can't take with them)for very long. People don't seem to consider it is also an investment for the company, you can't easily liquidate the resources,
and buy something down the road.
this is the biggest misconception about mines. people assume that because they pull the stuff out of the ground it costs them nothing, when the reality is the costing of mining the resource is often more than the base price. Also demand is often irregular but staff & machinery must be keep operating regardless of whether there is work or not.
so YES, mines do and have closed frequently in the past and certainly will now that we are entering a depression.
True story . These places are often running on so much borrowed money too and costing an absolute fortune to run even for one day , the numbers are staggering !
So if things stop cookin they can be in very serious trouble within a 'very 'short period of time , even just a few weeks and can soon have no choice but to close unfortunately.Cheers
mmm prices like $1300 aweek rent. thats $67600 p.a rent . these miners probably on good wicket earning bout 150k-200k p.a but after rent taken out will be earning 80k- 130k p.a. this to live in hot arid places and miss out on a lot of stuff.during downturn not worth it when they can earn 80- 100k p.a in nicer area …thats why these rents arent sustainable
Asset or Liability?
These numbers are great but are also high risk.
I hope these people who own these properties do well although I do not know any personally.
The question is what will happen when the parties over.
Secondly, I do not think that miners are that stupid to live in hell and pay all their hard earned dollars on rent.
Apparently Proserpine is booming ??? and Canonvale ??? however I see these ares as being like the Gold Coast "Boom and Bust"
What a lot of people don't know here is the number of bank forclosures on major players … this morning I have heard 4 big boys in QLD have had their loans called in and administrators appointed … over 4 billion dollars of real estate will be massively devalued in SEQ
D … interesting times and worse to come … work smart not hard.
the rent is subsidise by the mining company to bring worker in .steve only time will tell if your right about mining towns.but one thing about coal the price for 2008 contracts will fund work for year to come ,mining companys don't think 1,2 years as this slow down will last. mining companys think in 10,20years.the australian coal mines were caught lacking in the last run, when it all starts again hopefully we will be on the ball.big chinese companys buying into australian mines is a shore sign it is not over.
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