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LETMYSILVERGO
5th November 2008, 12:57
The new order in Australian mining – uncertainty and panic
http://www.mineweb.co.za/mineweb/view/mineweb/en/page67?oid=72386&sn=Detail


Many of those engaged in Australia’s mining industry would have witnessed yesterday’s running of the Melbourne Cup -- the horse race that brings Australia to a standstill – from their homes rather than the mine mess or company function, because they are no longer employed.

Posted: Wednesday , 05 Nov 2008

PERTH -

The daily announcements on the Australian Stock Exchange and in business media reports are painting a picture that shows mineral exploration, mining, financial services and stockbroking services will be more than decimated by Christmas.

There are other sectors such as drilling that have already been harder hit as junior explorers and some mid tier companies limit or completely curtail exploration activity as many now have market capitalisations that reflect only their cash backing, or worse.

In the past two weeks two juniors have placed themselves in the hands of administrators - Tamaya Resources and Macmin Silver - and market observers see these as the tip of the iceberg, as several companies have been identified as having less than $A1.2 million ($US832,000) -- a benchmark for capital required to survive another 18 months in what could be a period of financial paralysis for stockbrokers and resource financing groups.

At the big end of town Clive Palmer has reportedly placed his plans for an $A18 billion raising on the Hong Kong Stock Exchange for his Pilbara iron ore projects linked to his Resource Development International.

One of the biggest engineering groups WorleyParsons, so desperate to hire staff six months ago - like most others in the resources sector - has admitted to taking 250 jobs off mining sites, to re-locate 180 but will shed 70. The big new iron ore miner Fortescue Metals Group (ASX: FMG) says it will curtail its rate of expansion.

It is the hiring, rather than firing business, reflected by one major employment agency shedding one floor in its building.

The change from a boom to what may prove to be a bust for many has also caught governments on the hop in the Federal Government in Canberra and royalty-driven Western Australian, Queensland and New South Wales governments. They are now looking to re-adjust budget income on the basis royalty inflow will slow rather than continue rising, due to lower iron ore, coal and base metal prices and stalled expansions and mine developments.

Established mid-sized iron ore miner Mount Gibson Iron has not only shed 190 jobs but reportedly has agreed to deliver its last shipment to China at one-third of the prices being achieved earlier this year through the price hikes of around 80% achieved by Rio Tinto Ltd and BHP Billiton.

Today the market is abuzz with who might be the white knight Perth's daily newspaper The West Australian said may emerge in the battle for control of Mt Gibson after the two Chinese partners Shougang Concord and APAC Resources lifted their equities in the price-depressed miner to a collective 40.5% What had made Mt Gibson a volatile stock apart from the bleak market and pressure on metal prices was the departure of Russian billionaire Alisher Usmanov, who held 19.7% in April.

Mt Gibson is seen as just an example of what faces the budding iron ore producers in WA's mid north and Pilbara, particularly those which already have Chinese partners now playing coy on current or planned shipments.

With the flat beer scenario for junior iron ore companies a factor that is now hitting home relates to comments made by this writer 18 months ago when the second level of higher iron ore prices were being demanded by Rio Tinto, BHPB and Brazil's Vale. One Asian market analyst told Mineweb at the time that the Chinese steelmakers and metal houses were getting upset with the high prices being demanded and that, as a result, the Chinese would seek to invest or joint venture with planned new iron ore miners to cushion the iron price blow.

That happened! Now the Chinese companies have the whip hand on new or planned iron ore shipments and contracts and may well gain a more dominant or control stake in Australian junior and mid-tier companies.

Against the grain is Atlas Iron Ltd (ASX: AGO) which is on track to ship its first ore from the Pardoo project to China at Christmas after there was speculation this project could be temporarily derailed.

The rays of light in the Australian scene are provided by local gold miners who have got their cash operating costs harnessed, for unhedged gold today is fetching $A1,099/ounce (based on $US755/oz).

Kelly
5th November 2008, 13:15
With the flat beer scenario for junior iron ore companies a factor that is now hitting home relates to comments made by this writer 18 months ago when the second level of higher iron ore prices were being demanded by Rio Tinto, BHPB and Brazil's Vale. One Asian market analyst told Mineweb at the time that the Chinese steelmakers and metal houses were getting upset with the high prices being demanded and that, as a result, the Chinese would seek to invest or joint venture with planned new iron ore miners to cushion the iron price blow.

That happened! Now the Chinese companies have the whip hand on new or planned iron ore shipments and contracts and may well gain a more dominant or control stake in Australian junior and mid-tier companies.


Interesting. This means that China is not only making a big play to control the mines in Australia, they've also set their sites on Africa. Big time.

http://news.sawf.org/Business/32806.aspx

research24
5th November 2008, 15:37
This is what happens when you're weak. And stupid.

Kayaker
5th November 2008, 21:17
Kelly: I saw pictures in National Geographic of African mines where Chinese supervisors walk around carrying sticks to "manage" wokers while they manually scrounge for bits of ore for the equivalent wage of $1.00 a day. I was surprised that a liberal publication as NG would print pictures or the Chinese would allow it. Something to think about the next time you shop at ChinaMart; Oh! I mean Walmart.

LETMYSILVERGO
5th November 2008, 22:07
YEA, LOT OF THINGS, ( GOTTA HAVE THOSE THINGS) me too, HAVE THE FINGER PRINTS OF LITTLE CHINESE CHILDREN ON THEM.

Kelly
6th November 2008, 03:27
Kelly: I saw pictures in National Geographic of African mines where Chinese supervisors walk around carrying sticks to "manage" wokers while they manually scrounge for bits of ore for the equivalent wage of $1.00 a day. I was surprised that a liberal publication as NG would print pictures or the Chinese would allow it. Something to think about the next time you shop at ChinaMart; Oh! I mean Walmart.

I saw a video about the Chinese treatment of the Africans a couple of weeks ago, and it was pretty much the same thing. When they go in to develop a project, the good jobs are given to imported Chinese people, and the African people are being treated as slaves. No, actually worse than slaves. Slaves got their room and board taken care of by those who owned them, but $1 a day won't cover housing and food.

I honestly believe most people have totally underestimated the Chinese and what they are doing. This is the first time we have ever seen a Communist government go for capitalism in a big way, and in my view, it's a very, very dangerous mix.

I seriously doubt if folks in Australia are going to be ready it.