#Official Mining Thread

[Will]

Just like no boom is forever, no recession is forever. Although it may not appeal to our culture of instant gratification, the minerals are still there. All this means is that we will have to wait a couple of years more for the boom to begin. However the good news is that a lot of the work has already being completed, so that by the time mineral prices rise again we will be in a good psoition not to miss the boat.

[skyliner]

SA is in a much better position than most. Access economics predicts that SA and Tas will be the only states not to go into recession.

Also read this in the AFR yesterday - pretty amazing but good news. Past history shows we generally go down the tube in a big way in recessions. it's not all doom and gloom as Mattblack said.

SA - STATE ON THE MOVE

[Mants]

Just like no boom is forever, no recession is forever. Although it may not appeal to our culture of instant gratification, the minerals are still there. All this means is that we will have to wait a couple of years more for the boom to begin. However the good news is that a lot of the work has already being completed, so that by the time mineral prices rise again we will be in a good psoition not to miss the boat.

hopefully when i finish my chemical engineering degree

[SRW]

Economic outlook better for SA: report
Mon Jan 19, 2009, ABC News Online
The latest economic forecast shows Australia may be heading towards recession but that South Australia is likely to fare better than other states.

The Access Economics report says the state's share of the Australian economy will grow in the next few years at rates not seen since the 1960s.

It has attributed the growth to solid spending and a boost in jobs and population and expects the wine and education industries to benefit.

But it warns the economy is not bulletproof, with the resources sector expected to face a 'dog of a year'.

The report says tumbling copper prices could affect the expansion of the Olympic Dam copper and uranium mine, while Mitsubishi's closure last year may be a signal of worse news to come.

Premier Mike Rann says it is difficult to predict how the global financial crisis will affect the South Australian economy in the coming year.

"Well it remains to be seen, we certainly hope to," he said.

"I mean the whole world is going to be affected by this global financial crisis that isn't of Australia's making, and we know that we've got around the world tough times ahead."

All in all, a fairly re-assuring outlook for SA. The mining projects that were scheduled to start this or next year may be delayed a few more but the resources will surely be there to exploit at some point or another. In the meantime, our economy is surprisingly diverse (thanks for those stats, AtD), so even if some industries start to falter, there's still growth assured for others -- particularly the defence and education sectors. Actually, the Hobart-class destroyers should reach the construction stage either at the end of this year or the beginning of the next, and we should see around 1,500 jobs with that.

[rhino]

Olympic Dam is mainly a uranium mine with good copper and gold as additional minerals.

I think you'll find Olympic Dam is primarily a copper mine, with gold and uranium being the additional bonus materials. The ammount of copper up there leaves the gold and uranium waaay behind.

[skyliner]

Exactly. Supported by many articles in the AFR.

SA- STATE ON THE MOVE

[skyliner]

In the Australian P2 today - the ODX is deferred. Not many details except that is was a $6.7bn cost. I reckon they are keeping a close eye on gold prices however - $1440 an oz. now. (Australian).Disappointing about the deferraL - BUT NOT CANCELLED!

SA - STATE ON THE MOVE

[frank1]

In the Australian P2 today - the ODX is deferred. Not many details except that is was a $6.7bn cost. I reckon they are keeping a close eye on gold prices however - $1440 an oz. now. (Australian).Disappointing about the deferraL - BUT NOT CANCELLED!

SA - STATE ON THE MOVE

But does the state gov in this economic climate still have the balls to borrow money banking on the ODX expansion actually happening?

[monotonehell]

In the Australian P2 today - the ODX is deferred. Not many details except that is was a $6.7bn cost. I reckon they are keeping a close eye on gold prices however - $1440 an oz. now. (Australian).Disappointing about the deferraL - BUT NOT CANCELLED!

SA - STATE ON THE MOVE

But does the state gov in this economic climate still have the balls to borrow money banking on the ODX expansion actually happening?

While commodity prices are low, production prices are high, mining companies are understandably sitting on their hands. But when (if?) prices rise or the cost of extraction falls (ie wages) to a point where profit can be made then mines will go back into production.

A smart government would pave the way for this future by investing in and planning the delivery of appropriately timed infrastructure. I might be wrong but I think the SA govt are?

[rhino]

In the Australian P2 today - the ODX is deferred.

I can't find any reference to this in the electronic media, not even in the stockmarket websites' announcements. Can you please supply a link to the article?

Also, I read today that copper stockpiles worldwide are getting low. Low stockpiles means more demand, which means better prices, which means it's more likely that a huge copper mine like ODX will not be deferred for long.

[Wayno]

Also, I read today that copper stockpiles worldwide are getting low. Low stockpiles means more demand, which means better prices, which means it's more likely that a huge copper mine like ODX will not be deferred for long.

"Stockpile Strategy" appears to be the latest game in the mining industry. The beauty of world commodity supply and demand in new and exciting board game!!

In years gone by, mineral price contracts were set for quite long periods (12+ months), but from 2009 i believe prices are adjusted at least quarterly. The basic play in "stockpile strategy" is for Miners to deplete their stockpiles to help justify a larger price increment next quarter.

[skyliner]

In the Australian P2 today - the ODX is deferred.

I can't find any reference to this in the electronic media, not even in the stockmarket websites' announcements. Can you please supply a link to the article?

Also, I read today that copper stockpiles worldwide are getting low. Low stockpiles means more demand, which means better prices, which means it's more likely that a huge copper mine like ODX will not be deferred for long.

Rhino - I picked this up through the hard copy version. The article spoke of big infrastructure/mining contractions a cross the nation in response to the recession. I was rather surprised as I had read a week before about the plans remaining as they were. (AFR). The premier was saying he was informed of this by BHP. Billiton.

SA - STATE ON THE MOVE

[Wayno]

Rhino - I picked this up through the hard copy version. The article spoke of big infrastructure/mining contractions a cross the nation in response to the recession. I was rather surprised as I had read a week before about the plans remaining as they were. (AFR). The premier was saying he was informed of this by BHP. Billiton.

Ah, the subtleties of english Here's an extract from Jan 21 ==> "Mr Rann said BHP Billiton had indicated to him today that it remained committed to the project." but this is unlike Rann's previous statements as he does not state timeframes, only commitment.

[rhino]

From today's Business Spectator:

BHP Billiton expected to announce cost cuts
AAP, with a staff reporter 3:59 AM, 4 Feb 2009

Global miner BHP Billiton Ltd/Plc is expected to announce cost-cutting measures, which may include project deferrals, as part of its first half results.
According to The Australian Financial Review newspaper, BHP is expected to shelve more developments and focus on cutting costs from its operations as signs point to a prolonged collapse in global demand for raw materials.
The divisions thought to come under scrutiny include BHP's aluminium and stainless steel materials sectors.
Analysts expect BHP Billiton to report a first half profit of up to $10 billion.
They also believe the miner will defer a large share buyback so it can snap up distressed assets.
Analysts have recently downgraded their forecasts for BHP Billiton's reported profit to a range of $US4.85 billion ($A7.64 billion) to $US6.42 billion ($A10.11 billion) for the first half of the 2009 financial year.
The world's biggest mining is set to release its results on Wednesday, to a backdrop of mounting speculation that chairman Don Argus will announce his intention to retire around mid-year.
The Australian newspaper said John Schubert is seen as the most likely replacement for Mr Argus, who will have been chairman of BHP for 10 years in April.
The profit downgrades came on the back of impairment charges for the company's nickel division, production curtailments and lower base metal and oil prices.
They also followed a hit from copper provisional pricing unveiled in BHP Billiton's second quarter production report last month.
Commodity prices have sunk as demand slows amid the global economic downturn, with many producers forced to writedown the value of assets while cutting output and jobs to remain competitive.
BHP Billiton reported net profit of $US6.017 billion ($A9.48 billion) in first half 2007/08.
Analysts agree that BHP Billiton is in a strong position to weather the economic storm.
It has a strong balance sheet, minimal debt and a cost of production on average towards the lower end of the spectrum.
BHP Billiton is also considered to be in the ideal position with its strong balance sheet to acquire assets at low prices, with limited competitors.
"We do not expect a large buyback to be announced at the upcoming result, and instead expect the powder to be kept dry for distressed asset sale opportunities," Citi analyst Clarke Wilkins said in a note to clients.
The company shut and wrote down the value of its Ravensthorpe nickel mine in Western Australia last month after a significant drop in the price of nickel, which is primarily used in the production of stainless steel.
BHP shares edged down 0.73 per cent to $29.78 on Tuesday.

[raulduke]

where does it refer to ODX?