Forums / Property Investing / Help Needed! / QLD mining regions (Bowen & Surat Basins & Gladstone): Willing to help anyone with questions

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  • Profile photo of JT7JT7
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    Yes it's a valid argument zing but the problem is it adds to increasing sovereign risk. 

    What international companies will be asking themselves is whether it's worth the risk of pouring billions of dollars into investment when federal and state governments continue to change and introduce policies that are not conducive to the industry. 

    It's a fair call saying Newman grasped the opportunity but how about the reduced revenue when mines shut down production? Or the perception to overseas investors? 

    Profile photo of zing_zing_
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    True, so what can a fed government do now to improve our competitiveness since the state coalition governments have all but destroyed the benefit of the MRRT? 

    Oh yeah get rid of the MRRT and Carbon tax…… what a coincidence! It's all very political. Just like the announcement by BHP to close Gregory the day before the QLD budget.

    Profile photo of zing_zing_
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    Right on cure to put an exclamation point on my previous post:

    http://www.theaustralian.com.au/news/breaking-news/newman-takes-aim-at-bhp-billiton-boss/story-fn3dxiwe-1226473326668

    As an investor with property in Emerald I really hope the politics get out of the way soon.

    Profile photo of JT7JT7
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    Yep read similar in the AFR this morning.

    Certainly agree with you there zing, I've got a couple in Emerald myself. 

    Might be a little bumpy in the short term mate but as my PM said be realistic with your rents and sit it out. Certainly no need to panic. Long term it's very promising. 

    Profile photo of JT7JT7
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    zing_ wrote:
    True, so what can a fed government do now to improve our competitiveness since the state coalition governments have all but destroyed the benefit of the MRRT? 

    Oh yeah get rid of the MRRT and Carbon tax…… what a coincidence! It's all very political. Just like the announcement by BHP to close Gregory the day before the QLD budget.

    First priority…..get rid of this pathetic minority government! 

    Profile photo of dizzy_7dizzy_7
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    What would realistic for rent be?

    I am looking at building a 4/2/2 and just dont want it to be like $550 a week or something that kills the whole deal.

    Profile photo of zing_zing_
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    To be honest it may go there dizzy. I would suspect you would need to be at around $600-$650 per week at the moment to get it rented quickly.

    If you are building you should get pretty decent depreciation in Emerald with a high ratio of construction costs to land value. Therefore I'd be surprised if $550 per week kills the deal?

    I will remain relatively relaxed as long as it doesn't dip below $500 for a newish 4 x 2 before moving up again.

    Profile photo of Josh AthertonJosh Atherton
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    Dizzy, 

    Have you thought of NRAS? 

    Profile photo of moxi10moxi10
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    I agree with Jack, no cause for panic, that would probably result in the worst outcome possible. What is occurring in the region at present has occurred in the past, and mid to long term a recovery and higher peaks have followed, and will again. Vacancy rates have been low, and rents high. There is obviously room for both to adjust before landlords are likely to face serious hardship. There are lessons to learn from any downturn, and although there was no shortage of advice from experienced investors available for any who chose to heed it, most people tend to learn lessons the hard way. The towns with the more diversified industrial and economic bases, such as Emerald and Mackay, should  hold up fairly well until coal prices recover and more new projects start up. Current circumstances highlight the fact that unless you have sufficient capital to have safer investments elsewhere to balance your portfolio, investing in single industry towns can be a risky proposition. But short term pain can be a very educational experience, and help to temper an investor's skills.  In the meantime, there are still many committed projects underway, and more miners and contractors working in the region than ever before. I like the saying "we have nothing to fear but fear itself."  And here's some more good news ("BHP Billiton metallurgical coal remains focused on the projects currently under execution….")  disguised by the headline and some bad news.

    http://www.cqnews.com.au/story/2012/09/21/coalfields-cull-continues-miners-face-an-unclear-f/

    Profile photo of Josh AthertonJosh Atherton
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    As Central and North Qld continue to grow as booming economic hubs with a varied industry base, a move like this would further cement long term population growth in regions like Mackay and Townsville. The provision of more services and infrastructure to these cities would make them an even more desirable place for people to live. Coupled with outstanding employment opportunities, we believe that key regional cities in Qld will experience above normal population, wage and housing growth long into the future.

    http://www.couriermail.com.au/news/north-queensland-wants-to-go-it-alone-and-create-its-own-economic-zone/story-e6freon6-1226481379617 

    Profile photo of JT7JT7
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    This recent lull in commodity prices is all part of the cycle.

    There was bound to be a correction from the price heights achieved recently. When prices were high the big players threw money around like it was going out of fashion. Now commodity prices have come down the big companies are starting to tighten their belts and think responsibly about splashing their money around. I see Andrew Forrester has put a pad lock on the stationary cupboard and put a stop to free company bbqs. 

    Prices may have come off but volume will increase.  

    http://www.theaustralian.com.au/national-affairs/chinas-steel-mills-to-come-back-into-the-market-says-government-advisor/story-fn59niix-1226476880181

    Profile photo of moxi10moxi10
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    That's an interesting read, Josh. The sentiment behind the idea is mirrored in the Hunter Valley, where the local population and councils complain about the fact that a disproportionate share of state revenue comes from the mining regions, and not enough of it comes back to compensate for the negative impacts inflicted by the mining industry. And it's no secret that W.A. wants a bigger slice of their pie from the Feds. Will be interesting to see how it goes in Queensland, but any gain for north Queensland would be a loss for the south, so there will be a lot of resistance.

    Jack, I know you and I agree the longer term picture for resources is very positive. One thing there's no doubt about is that there's plenty of coal here….

    http://www.cqnews.com.au/story/2012/09/26/outlook-seems-good-for-eromanga-basin/

    Profile photo of JT7JT7
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    Perhaps we've hit the bottom and slowly on the way back up……..

    http://www.indexmundi.com/commodities/?commodity=coal-australian

    Profile photo of moxi10moxi10
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    Profile photo of JT7JT7
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    Profile photo of DubstepDubstep
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    Hi JT,

    Bugger, you got the post in before me !

    It's good news for the Galilee basin though, when do you reckon she'll kick off ?

    Profile photo of JT7JT7
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    Hi Dubstep,

    Hancocks Alpha Coal Project should start construction early 2013 and most likely start exporting 2015. It should really start ramping up now with the other projects coming on. There's so much talk about what China is doing but i think that India seems to be forgotten about. They are quietly moving in and securing the mines, rail and ports to support the insatiable  need for energy to support urbanization and industrialization.

    Alpha, Barcaldine, Emerald and Bowen markets will rise rapidly off the back of the immense investments in the Galilee Basin. it's an exciting time and those who have got in early will benefit significantly. Personally I think the Emerald market looks extremely promising as it will be the central hub to these Mega Mines.

    Jack  

    Profile photo of DubstepDubstep
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    Hey Jack,

    Too true !

    It will be also good news for employment with the poor economic state over the past couple of years.

    A bit of good employment news will be a welcome relief. 

    Profile photo of moxi10moxi10
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    Very true, Jack. The Indian's obviously need the coal, and are moving aggressively to secure supply from Australia. Short-term drops in the price will not deter them from proceeding with acquisition and development, as major players obviously have their eye on the bigger picture and longer outlook. If the current low prices have any affect at all on their plans, it is most likely that they will see it as an opportunity to secure more ground while the competition is reduced. All indications confirm that the Galilee Basin will soon provide a major economic boost for Queensland, and, as you point out, Emerald is securely placed in the driver's seat.

    JT7 wrote:
    Hi Dubstep,

    Hancocks Alpha Coal Project should start construction early 2013 and most likely start exporting 2015. It should really start ramping up now with the other projects coming on. There's so much talk about what China is doing but i think that India seems to be forgotten about. They are quietly moving in and securing the mines, rail and ports to support the insatiable  need for energy to support urbanization and industrialization.

    Alpha, Barcaldine, Emerald and Bowen markets will rise rapidly off the back of the immense investments in the Galilee Basin. it's an exciting time and those who have got in early will benefit significantly. Personally I think the Emerald market looks extremely promising as it will be the central hub to these Mega Mines.

    Jack  

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