BHP Billiton – Jimblebar $4 billion contract

Just in case anyone thinks BHP Billiton has given up on mining altogether, it has just handed a major construction contract to engineering firm Monadelphous for its $4 billion Jimblebar iron ore mine in WA. Construction work is scheduled to start next month. The Resources Revolution continues …

Source: Hotspotting.com

ABS: There’s plenty of life left in the resources sector

The investment statistics published by the ABS show there’s plenty of life left in the resources sector. Spending intentions by businesses in the mining industry point to another big rise this financial year. After a 33% rise in FY2010 and a 75% increase in FY2011, investment in the mining sector will rise a further 41% in FY2013. $82bil was invested in FY2012 and the figure for FY2013 is projected to be $116bil. The Resources Revolution continues …

Source: Hotspotting.com

RP Data: Cheaper to buy than rent

Orignal RP Data reports can be downloaded here:

Buy_vs_Rent_Analysis

RP_Data_Buy_vs_Rent_Report_Aug-12

 

MORANBAH has been named the number one area in regional Queensland where buying a house is more affordable than renting.

The median weekly rent for a house in the town is $1900.

Dysart came a close second on a list of the top 10 suburbs where buying is more affordable than renting.

According to a report by RP Data (Residential Property Data) renters can expect to pay a median of $1400 a week in Dysart.

Suburbs closer to Mackay’s CBD were also named in the report as cheaper for buyers.

Renters in Ooralea could save an average of $290 a month if they chose to buy. The median monthly rent is $2817 compared to the average estimated monthly mortgage repayment of $2526.

Similarly, buying a unit in Andergrove could save a renter more than $280 a month.

Renting a unit in the suburb could cost an average of $1928 a month while homeowners there pay an average $1644 on their mortgage.

In North Mackay, the median monthly rent of a unit is $1560 while the average mortgage repayment is $1550.

Compared to Brisbane, regional areas in Queensland have a greater number of suburbs where it is cheaper to buy than rent.

The stronger performance of regional markets reflects the fact that the majority of Queenslanders live outside Brisbane.

It’s no surprise the results have also been linked to the mining boom – in Moranbah, the median monthly rent is almost double the average monthly mortgage repayment of $4212.

Collinsville, in the Whitsunday region, also made the top 10 with a median monthly rent of $1950 and an average mortgage repayment of $1513.

Other regional areas in the report’s top 10 include Blackwater and Emerald in Fitzroy, Sippy Downs and Minyama on the Sunshine Coast, Wandoan on the Darling Downs and Parkside in the North-West.

If you buy you could save:

  • $4020 a month in Moranbah
  • $2740 a month in Dysart
  • $430 a month in Collinsville
  • $290 a month in Ooralea
  • $280 a month in Andergrove (unit)

 

 

Australia mining revolution creating long-term opportunities for property investors: Terry Ryder

I love this guy! You tell ’em Terry! Go go!

With friends like Martin Ferguson, the federal government doesn’t need Tony Abbott.

Ferguson had the brain explosion of the year when he declared the end of the mining boom.

Even in modern times ruled by media sound bytes, this statement was so thoughtless and simplistic as to be irresponsible.

What was he thinking? Clearly he wasn’t thinking at all.

We live in a nation hamstrung by fear and uncertainty. In the minds of many people, Australia’s one major asset is the strength of its mining sector. Then along comes a senior federal minister and announces that even that is dead.

Ferguson’s performance highlighted the nation’s greatest weakness – the absence of strong, positive, talented leaders, the single biggest reason why consumer confidence is so low.

Ferguson’s brain fart was quickly followed by BHP Billiton’s announcement it was deferring implementation of major projects including the Port Hedland export port development and the expansion of the Olympic Dam mine.

The combination of the two statements, Ferguson’s and BHP’s, has converted the “mining boom is over” idea into fact for many observers. Writers are already pumping out articles that assume the resources party is finished.

I’ll repeat an earlier statement: Australia is not having a mining boom, it’s in the early stages of a resources revolution. The global pecking order is changing, with new growth nations rising in economic importance as former powers fade.

Nations with big populations and a desire to achieve the living standards we take for granted have embarked on urbanisation and industrialisation. These processes are long term and will extend many decades into the future.

A temporary slowdown in China’s growth rate (to a mere 7% to 8%) is a minor blip on the long-term radar screen. The tendency of our major newspapers to dumb things down has created the image that everything depends on China, ignoring the growing importance of other rising powers like India, South Korea, Malaysia, Indonesia, Taiwan, Vietnam, Thailand and others.

Australia is the quarry feeding these changes. We’re not far off the point where Australia will be the world’s leading supplier of gas, while our stocks of iron ore and coal are essential to the growth nations.

The only thing that has changed is that commodity prices have come off their peak – another short-term blip on the long-term radar.

They’re still building the $43 billion Gorgon gas project, the $29 billion Wheatstone venture and $70 billion worth of LNG projects centred on Gladstone.

BHP Billiton’s management may have had a panic attack, but Rio Tinto, Fortescue Metals and Hancock Prospecting are still powering ahead with their expansion programs.

Anyone whose vision extends beyond the 24-hour news cycle can see that Australia is caught up in events with very distant horizons. And that creates long-term opportunities for property investors.

The accommodation shortage that is pushing up rents and prices in Gladstone is as real today as it was when Ferguson momentarily forgot he was sitting in front of a radio microphone.

Port Hedland was bursting at the seams, with houses averaging more than $1 million and rents nudging $2,000, before BHP Billiton announced deferral of the harbour expansion, and it still is.

The emergence of the new Galilee Basin mining province, where one $6 billion coal project has just received federal approval and others of similar size are in planning, continues to make Emerald a place with almost zero residential vacancies.

Charter flights full of fly-in, fly-out workers are still clogging up airports in Perth, Brisbane, Adelaide and elsewhere.

Good luck to anyone trying to make a last-minute booking for a hotel room in Perth or a hire car in Gladstone.

My over-riding view has been that the best places to invest in Australia are regional centres, which benefit from the resources sector but do not depend on it, and it still is.

Terry Ryder is the founder of hotspotting.com.au and can be followed on Twitter.

Anglo American to cut Moranbah North jobs

Anglo American will cut at least 50 jobs when its Moranbah North mine reverts back to a single longwall operation.

It comes on the back of a rash of coal mining job cuts across the Bowen Basin.

Earlier this month BMA, Rio Tinto, and Xstrata all announced they will be reducing their workforce.

BMA recently cut 100 employees from the contractor workforce at its Gregory Crinum coal mine in Queensland.

It has also halted expansion works at its Peak Downs coal mine.

Rio Tinto has cut 70 contractors from its Kestrel-KME operation, as well as slashing positions at its Clermont mine and closing its Blair Athol operation; Xstrata will be cutting contractor numbers on its coal mines but refused to detail how many workers would go or which sites would be impacted.

BHP CEO Marius Kloppers this week said it was part of a “broad industry movement” toward cutting jobs on Queensland coal developments.

Now Anglo American has joined the other major with its announcement it will cut positions, the Daily Mercury reports.

It comes as the mine reduces its operations from two down to a single longwall.

Due to this it will reduce its workforce, and has called on some workers to take voluntary redundancy.

An Anglo spokesperson told the Daily Mercury the decision was made “in light of recent market conditions and declining coal prices”.

“This … will reduce workforce and contractor activity across the mine,” she said.

“We are currently conducting a review of business requirements for the new operating environment.

“As a result of the operational changes, Moranbah North mine announced a voluntary separation process in which we have invited employees to register a non-binding expression of interest if, based on their personal circumstances, they would like to leave the business,” she said.

The CFMEU slammed the shrinking coal operations across the Bowen, stating that companies are cutting jobs because commodity prices have slumped.

[Anglo is] going to reduce operations from two longwalls to one longwall,” Smyth explained.

“That’s up to 50 jobs as a minimum. It could be more. They are not entirely sure because they are reviewing operations.”

There is no word yet as to how this will affect Anglo’s planned development of the Moranbah South and Grosvenor projects.

Source: http://www.miningaustralia.com.au/news/anglo-american-to-cut-moranbah-north-jobs

Resources boom – and Emerald property price rises – just beginning: Terry Ryder

Rumours of the death of the resources boom have been greatly exaggerated. But media chatter to that effect has penetrated the psyche of some investors who have started to fret and delay decisions.

A message that “the boom is over because China is slowing down” is typical of the simplistic twaddle peddled by economists suffering from limelight-deficit syndrome and repeated by lazy journalists.

One lukewarm press announcement by BHP Billiton and suddenly the chooks are running around clucking about the end to the good times.

In reality the resources boom is only just starting. Brisbane property adviser (and national buyers’ agent of the year) Simon Pressley says we should be calling it “the resources revolution”, and I agree. The global change inspired by new growth nations like India and China will extend decades into the future, as will Australia’s role in the process – though not without hiccups along the way.

Rio Tinto says it sees no slowdown in overseas demand and is full steam ahead with its iron ore expansion plans. Ditto Fortescue Metals, Hancock Prospecting and the companies that are advancing the mega gas projects.

Hancock, headed by Gina Rinehart, who has been branded our wealthiest individual, has strongly advanced its two biggest ventures in the past week or so. The $7 billion Roy Hill iron ore mine in Western Australia has won the right to import skilled workers from overseas, and the $6.4 billion Alpha coal project in Queensland has won state government approval.

Apparently Rinehart hasn’t been informed the party is over.

The job of property investors is to tune out all the background static from the chattering economists and grandstanding politicians and focus on the end game, with a long-term perspective.

Ignore all the “white noise” in the media, look at what’s really happening and try to see where the opportunities lie.

The Alpha coal project has won government approval. It involves a major coal mine and a 495-kilometre rail link to the Abbot Point export facility. It will create 3,500 jobs. It is one of three multi-billion-dollar projects focused on the Galilee Basin, which is shaping as the nation’s new boom mining province. Rail links are planned by each of these entities, plus new export facilities.

Where lie the investment opportunities? Is it the tiny town of Alpha, the nearest settlement to the mining action? Is it Bowen, where Rinehart’s rail link will join up with the Abbot Point export terminal, which is rapidly expanding? Is it Mackay, a key regional centre with export facilities (also to be expanded) a little to the south?

Or is it Emerald, one of the most fortunately located towns in regional Australia?

Emerald is a regional centre of almost 20,000 that services agriculture and mining. The well-established Bowen Basin coal-mining province lies to the east and north-east, while the new Galilee Basin is to the west.

Emerald already has a very busy airport, with lots of fly-in-fly-out traffic, even before the mega mines of the Galilee Basin crank up. Residential vacancies are miniscule and the median house price rose 12% in the March Quarter alone.

Its long-term capital growth rate is 13% a year and rental yields above 7% can be found.

It sounds like a place of opportunity – unless you’re hooked into the boom-is-over mentality.

Terry Ryder is the founder of hotspotting.com.au and can be followed on Twitter.

Mining Boom or Doom?

Nick Burke from Property 4 Profit held a great webinar tonight about the Mining Boom or Doom. Nick discusses some of the biggest questions on everyone’s lips.

  • Whether the mining boom is coming to abrupt end…and what it means for us investors
  • Where you can find the best and safest positive cashflow yields in today’s market
  • Where to get the highest yields…without risking your money in a ‘one-horse’ boom town
  • A simple 3-step checklist that tells you when to invest in a regional cashflow area with confidence
  • The best hotspot to invest with long-term safety & confidence
  • The ONLY place outside of resource industry areas you should consider investing in right now

Video duration: 49:07

PS Again, the last portion of Nick’s video is his sales push.

Chinchilla

 

BHP Billiton to continue with $20b expansion of Port Hedland

The resources revolution continues…

BHP Billiton has announced its commitment to the $20b expansion of Port Hedland despite the reported fall in profits for FY2012 ended 30 June 2012, a first for the last three years.

Following the announcement of its 2012 numbers last week, the company suggested possible delays to all capital projects underway and a delay in approval of new ones until 2013, however has now clarified that it will go ahead with the expansion of Port Hedland.

BHP’s head of iron ore Jimmy Wilson spelt out that the outer harbour continues to be an important part of the company’s long-term strategy.

“Development of the Outer Harbour remains attractive,” said Wilson.

“Its initial development would require dredging a shipping channel and turning basin, as well as constructing a four kilometre jetty with associated stockyards and car dumpers at Boodarie.”

BHP also secured an approval from the Western Australia Minister for Transport and Port Hedland Port Authority to develop two additional berths in the Inner Harbour.

The right to develop the berths combined with efforts to ease congestion in the inner harbour is expected to boost the port’s capacity at a lower cost, Wilson added.

The resources revolution continues…

http://www.mining-technology.com/news/newsbhp-billiton-to-continue-with-20b-expansion-of-port-hedland/

The mining boom is over – NOT!

More intel comes out in the media following Deloitte’s irresponsible “media release” that the Mining Boom will be over in 2 years.

Engineering company Monadelphous has dismissed notions that the mining boom is over. It has posted a record profit and says it has enough resources projects to stay busy for many years. The Perth-based firm lifted profit 45% to $137 million, its 11th consecutive year of earnings growth. It clients include Chevron, Woodside, Rio Tinto, BHP Billiton and Xstrata. The Resources Revolution continues …

Bondi Beach ranks second among Australia’s most resilient price suburbs behind Spence in the ACT: RP Data

Sydney’s most famous beachside suburb, Bondi Beach, has ranked as the second best performing and most resilient suburb in Australia, according to figures compiled by RP Data.

The eastern suburbs location is the only the prestige suburb among the 14 suburbs to have an average discount of less than 3.2%, with the list dominated by a mixed bag of Sydney suburbs and Canberra suburbs.

Bondi Beach has a median price of $1.5 million, making it the most expensive suburb on RP Data’s list of best-performing suburbs. The off-the-plan Bondi Beach market faces a big test next month with the release of 85 apartments in The Pacific development, which could have been expected to secure a virtual sell-out in boom times.

Spence, a suburb in the Belconnen district of Canberra, is the most resilient suburb, with an average discount of just 1.5%. Properties in Spence take slightly longer than those in Bondi Beach to sell, at 61 days.

Spence was gazetted in 1972 and is named after William Spence, one of the founders of the Australian Workers’ Union, with all streets in the suburb named after trade unionists.

All the other suburbs on the top 14 list are priced under $1 million, with the cheapest being Macgregor, also in the Belconnen district of Canberra, gazetted in 1971 and named after Sir William MacGregor, a former governor of Queensland.

The list was compiled by RP Data for the Australian Financial Review and looks at sales for the year to June.

Houses and apartments in Bondi Beach are on average discounted by just 1.8% and take less than two months to sell.

The other Sydney suburbs on the list are Camperdown (four kilometres south-west of the CBD), Strathfield South (14 kilometres west of CBD) and Peakhurst Heights (22 kilometres south of the CBD).

Australia’s 14 most resilient suburbs

  Discount Days on market Median price
Spence, ACT -1.5% 61 $484,000
Bondi Beach, NSW -1.8% 51 $1.5 million
Scullin, ACT -2.1% 44 $468,000
Richardson, ACT -2.7% 66 $445,000
Peakhurst Heights, NSW -2.6% 33 $769,000
Camperdown, NSW -2.8% 58 $856,000
Condor, ACT -2.8% 67 $515,000
Evatt, ACT -2.8% 57 $481,000
Charnwood, ACT -2.9% 61 $387,000
Gilmore, ACT -3% 55 $485,000
Macgregor, ACT -3% 72 $440,000
Strathfield South, NSW -3.2% 63 $743,000
Gowrie, ACT -3.2% 63 $535,000
Latham, ACT -3.2% 52 $464,000

Source: RP Data/Australian Financial Review

The full list, published in the Australian Financial Review, records that the best-performing suburbs are more likely to be more affordable ones further out from the city.

“Affordability in the market is really an issue,” RP Data head of research Tim Lawless told the AFR.

“These are areas that have a strong foundation to their marketplaces. These are really markets driven by vendors [sellers], not buyers. They’re not budging on prices, and buyers are meeting their price expectations.”

The best-performing Melbourne suburb is Croydon Hills in Melbourne’s outer north-east, with an average discount of 3.6%. Properties take an average of only 40 days to sell.

Flemington, just four kilometres north of the CBD, is Melbourne’s best performing inner-city suburb with an average discount of 4% and taking 40 days for a property to sell.

http://www.propertyobserver.com.au/residential/bondi-beach-ranks-second-among-australia-s-most-resilient-price-suburbs-behind-spence-in-the-act-rp-data/2012082656231