Hi. Thank you for posting this article.
Hi Josh. Would love to hear about JV and the numbers
HI Josh great blog mate. Keep up the good work
Hi all saw a worrying article in CQ News today. The council in Emerald has voted to hit investors with a 20% increase in residential rates over owner occupiers. Is this illegal? Do other councils do this? Interested to hear thoughts on this?
http://www.cqnews.com.au/story/2012/09/05/council-turning-coal-into-coin
As an investor this will affect my return although I use the same facility as an owner occupier. Seems unfair to me!
Some more worrying news!
Just received my rental statement from Moranbah. The usual stuff about increased rentals and also that news has filtered through that BMA are cancelling contracts and housing subsidies. At least 5 companies leaving the area.
Does anyone see a turnaround once the negotiations are complete?
Cheers,
Lee
A very good friend of mine Is a member of the LNP and she says that they are very close now to introducing rent control legislation in "housing stress areas" this will be like the strict controls on maximum rent and tenant right that they have in Germany. Housing stressareas is their definition of mining towns where rents are higher than the state median. She reckons there is votes in it.
Legal, yes of course it is. If you're dead set against it you should write to the council about how it will affect your decisions. The $155 per year extra shouldn't send you broke though considering the rent you may be getting. Make your argument to council that is only going to increase rents as investors will want to pass it on.
My thoughts are that if it increases amenities and livability in a regional town than it could be seen as an investment? just a long term thought thats all.
Lee, best to see my thoughts via my blog for help on this subject. It has been topical for quite some time now
I think the Labor governments initiative the ULDA have done their job in doing this. Personally, I doubt an initiative like this would go through, i guess time will tell
Any such legislation would discourage developers and investors from supplying housing. The reason rents are high in those areas in the first place is demand exceeds supply. Self-defeating solution.
Why would people take on the extra risk of a mining town without the extra reward of a nice yield?!
this could have a big impact on prices in the town if investors start pulling out.
-Nathan
$2.5 billion dollar Wiggins Island coal terminal at Gladstone begins construction. Worley Parsons has begun site preparation.
And a proposal for an additional 50 mil/ton/per/year terminal to be built
http://www.miningweekly.com/article/more-export-capacity-slated-for-gladstone-2012-03-
08http://www.miningweekly.com/article/lng-producers-create-a135m-social-infrastructure-fund-2011-12-05
http://www.miningweekly.com/article/queensland-aplng-project-gets-environmental-approval-2011-02-22
As Terry Ryder says "The Resources Revolution continues"
In spite of some recent warnings that the Gladstone property market may receive a "speeding ticket" in the near future, the phenomenal amount of investment, and the population growth slated for the town, indicate to me that investments in good locations with a 5-10 strategy remain very secure there. I'll be hanging on to my property in Kin Kora for awhile.
Just to clarify, the above post was intended to reiterate the huge investments in and around Gladstone. The media releases are dated, and not current, although their impact on Gladstone is. The following is a current release, and as mentioned in the article, the company would require more export capacity at Gladstone to ship it's coal.
Portfolio PI wrote:I think the Labor governments initiative the ULDA have done their job in doing this. Personally, I doubt an initiative like this would go through, i guess time will tellJosh, good news, you were right with your view. I caught up with the messenger yesterday and probed her a little bit deeper on this topic. She completely backflipped, denied that she had gave the impression that they were going to devise and implement such a policy in the first place. Frecking pollies.
Sorry about unsettling the horses on this one.
Further to this, Actions like these I believe should be likened to the past. Mining companies dislike labor governments and unions. Always, prior to an election will the magnify every pressure that the governments put on them in order to reduce them for the long run. 7 years ago the coal price was never even above $50 per ton, now it's slumped and sitting at $91 and the companies are saying they can't make money. This has been a result of government pressures and costs and the large companies will do whatever is possible to see that any government who threatens their viability is ousted.
There needs to be some serious belt tightening occur. Apart from the Australian Dollar, most of the cost factors could be managed to make coal mining a more viable option. One of the main problems is that the mining giants want everything to go full speed ahead while commodity prices are high as they want to get as much out of the ground as quickly as possible. However when prices come down, they are now exposed because they have been so flippant with costs and at the same time the governments have tried to wide the wave and increase red tape, taxes and fees. All to get to a point where all of a sudden we cant make money from $91 per ton when only 7 years ago we were profitable at $50.
Its greed from everyone that has made this get out of hand and for the longevity of the industry in this country it needs to managed.
of course, just my opinion
After 33 years of operation the BMA ran Gregory open cut mine has been put to maintenance mode and reduced its employee and contractor numbers accordingly. in 1997, the Crinum underground long wall operation started. Since then, the combined operation has seen production up to 5mtpa. However with flooding severely affecting BMA's open cut outputs, coupled with current commodity prices and continual union disputes, BMA have finally decided to make the move on the Gregory Crinum mine.
This move will see 55 FTE's and 245 contractors attempted to be re-deployed to other mining operations from BMA. We will have to wait and see what impact this has on the local market.
Put simply, Gregory had the second highest cost per ton to produce, behind Dysarts Norwich Park. What is my take on this? It will rattle a lot of investors and once again Emerald will go through a period of time where new housing starts are quite low. When union issues are resolved, commodity prices creep back up and flood affected mines can discharge their waste (hopefully this wet season), it will create a similar result to what we have just experienced. Not enough housing to cater for the rebound that always occurs in mining. This is not to mention the Alpha project whenever that starts. I still stand by the fact that those happy to experience the ups and downs will continue to be rewarding in the long run.
http://www.abc.net.au/news/2012-09-10/bhp-shuts-gregory-open-cut-coal-mine/4252808?section=business
Hi Josh,
Very interesting, what a difference a few years can make !
As Josh says above "it's greed from everyone…" And now the Queensland government, with incredibly bad timing, announces increases in royalty demands. I wonder if anyone in government is capable of considering the possibility that more tax from less mines equates to less revenue?
moxi10 wrote:As Josh says above "it's greed from everyone…" And now the Queensland government, with incredibly bad timing, announces increases in royalty demands. I wonder if anyone in government is capable of considering the possibility that more tax from less mines equates to less revenue?Yes Tony unbelievable isn't it. Talk about killing the goose that laid the golden egg!
How much more of a beating can these coal miners take!
I spoke to my property manager today in Emerald and she obviously confirmed the redundancies and went on to say it's a time to be conservative in your decision making when it comes to rental expectations. I'm sure it's nothing the Emerald market hasn't seen before. She obviously confirmed her faith in the Emerald market (as expected
) and reiterated there was certainly no need for investors to panic but I'm sure it'll dampen confidence in the short term. I wouldn't be surprised to see building activity drop off for a while. There's a lot of factors in play at the moment and I think we've just experienced a correction in the market. Iron ore looks like it may have reached it's floor and come back, China thinking about further stimulus, and the cycle rolls around again…….
Must admit though….bad timing from the Queensland State Government!
To be fair I don't think you can blame the QLD government for bad timing.
It's not every day you get the free kick of a lifetime from the federal government. What was Swan thinking when he declared mining companies could deduct state government increases from the MRRT?
Newman would have been crazy not to take up that "offer", he gets more royalties and the commonwealth pays for it. Not to mention NSW and WA had already taken them up on it.
) and reiterated there was certainly no need for investors to panic but I'm sure it'll dampen confidence in the short term. I wouldn't be surprised to see building activity drop off for a while. 
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