Regional centres a less risky way to capitalise on mining boom: Countdown to regional centres webinar

Mining towns present the ultimate risk-return conundrum for property investors, as I wrote in my Property Observer column in August.

They’re so hard for property investors to resist. They have the highest capital growth rates in Australia, and they have the highest rental returns.

They also are the riskiest options for property investors. Mining towns are single-industry economies – sometimes single-employer economies – and are vulnerable to downturns in the lone industry.

Over the past 10 years a typical suburb in an Australian city has averaged capital growth around 10% a year (thought certainly not in the past two years). The best suburbs in cities like Brisbane, Melbourne and Perth have averaged 14% or 15% – which is pretty good, because at those growth rates values are doubling every five years.

But the best of the mining towns have capital growth averages double those growth rates. Both Moranbah and Dysart, coal-mining towns in Queensland, have recorded growth in their median house prices averaging more than 30% a year. So too has Newman, deep in the Pilbara region of Western Australia. The median price for Cloncurry in western Queensland rose 60% in the past 12 months.

But the lure of the mining towns doesn’t end there. They also offer the highest rental yields in the nation. Many of them have double-digit rental returns. With the current surge in resources projects, particularly in Western Australia and Queensland, some mining towns can provide initial returns above 15%.

But it’s never plain sailing with mining towns. They lack diversity, so their economic life is a roller coaster. Some also service the surrounding farming economy, but the high levels of prices and rents are based on demand created by the resources sector.

This makes these locations highly vulnerable to downturns in the mining economy. When the global financial crisis struck in 2008, global demand for Australian resources fell. Miners downsized and in some cases shut down mining operations.

In coal-dependent towns like Dysart and Moura in Queensland, residential vacancies rapidly rose from near-zero to double digits. Gladstone, which has had four years of strong growth in house prices, had a 10% decrease in prices in 2009.

The small WA communities of Ravensthorpe and Hopetoun were devastated when BHP Billiton shut down a $2 billion nickel mine that had been completed only months earlier – 1,800 people lost their jobs and property values fell. Hopetoun’s price performance since then has been a decline averaging 6% per year.

More recently, we have seen mining companies refusing to rent properties in Moranbah over concerns about the high levels of house rents and upheaval in nearby Dysart followed the closure of the Norwich Park mine. Neither of these events is terminal to the towns’ investment prospects, but they demonstrate how uncertain property ownership can be in mining towns.

Ultimately, an individual’s attitude to investing in mining towns, or not, depends on their objectives, risk profile and experience as an investor.

It’s important for investors to understand their goals and to have a strategy for achieving them (it’s surprising how many don’t). Equally important is understanding their attitude to risk. If they prioritise safety and low risk, mining towns are not for them.

For anyone starting out as an investor, mining towns are not a good option. They may provide big gains short term, but ultimately values may decrease sharply if a downturn occurs, such as the one that followed the onset of the GFC in 2008.

On the other hand, experienced investors with substantial property portfolios may be happy to accept those risks within the context of a portfolio that has assets in safer locations.

Generally, investors wishing to safely exploit the rise of the resources sector should look at buying in regional centres that benefit from the mining upturn but are not dependent on it.

Regional cities and towns such as Toowoomba and Mackay in Queensland, Geraldton in Western Australia, and Muswellbrook in New South Wales have diverse economies but also prosper when the mining sector is rising. These are safer options than mining towns.

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

Norwich Park mine to reopen, union claims

Resources giant BHP Billiton has denied having a secret plan to reopen an unprofitable central Queensland coal mine next year with a non-union workforce.

BHP Billiton last month announced its joint venture company with Japan’s Mitsubishi – Billiton Mitsubishi Alliance (BMA) – would cease production at the Norwich Park coal mine, southeast of Dysart.

However, the Construction, Forestry, Mining and Energy Union (CFMEU) says a document leaked to the union suggests the multinational plans to restart the mine with contracted employees in the 2013 financial year.

The mine is set to be closed by May 11 when the 490-strong workforce’s contracts end.

BHP has previously said it will aim to redeploy staff to nearby mines.

The one-page document, sighted by AAP, is undated but bears the title “Norwich Park 5 Year Plan FY2013”.

The union’s district president Stephen Smyth says the page, assumed to be part of a larger document, is proof of the company’s desire to de-unionise the Bowen Basin.

“Having a document turn up apparently showing BHP has a five-year plan to employ new workers at a mine that is supposed to be closed in eight days does nothing to allay these fears,” he said in a statement.

A BHP spokeswoman told AAP the company had no plans to restart the mine with new workers.

“The decision to suspend operations is based on a number of factors that were communicated clearly at that time,” she told AAP.

The union has previously accused BHP of wanting to de-unionise, claiming workers last month found a job advertisement online offering a two-year contract starting immediately at the Norwich Park mine.

BMA at the time accused Mr Smyth of scaremongering.

http://news.ninemsn.com.au/national/8461535/norwich-park-mine-to-reopen-union-claims

Free house part of deal

WORKERS at terminally unprofitable Norwich Park Mine near Dysart could score a house if they opt for a redundancy package today.

BHP Billiton Mitsubishi Alliance made the offer in official documents circulated to mine workers – and now obtained by APN – when the project’s closure was announced on April 11.

They have until midnight today to respond.

In a question-and-answer section, the document explains what happens to staff who do not want, or are ineligible to slot into roles at other BMA mines.

For those who have purchased a house from BMA “under caveat”, taking a redundancy or being sent to work at a distant project would mean “BMA will remove the caveat conditions that apply to your property”.

“The property will then be owned by you free of encumbrances.”

For those who are given a role nearby, whatever arrangements have been made with BMA will remain in place.

Those given a voluntary redundancy will be given at least 13 weeks of base pay and a further $3762 for each year the worker has been with BMA.

The 490 BMA staff will fill out list of preferences 1-9 of company sites they would want to work – voluntary redundancy is the first on the list.

But all will have to apply for their new roles.

Those who do not fit the “skill set” of a new role and have not already opted for a voluntary redundancy will have a redundancy forced upon them.

A Construction, Forestry, Mining and Energy Union spokesman has warned workers to be cautious of taking a voluntary redundancy.

The union has previously protested both the closure of the mine, and that BMA was not automatically shifting workers into new positions.

“Whatever the worker decides, they need to be confident of their future arrangements,” a spokesman said.

“If you take the voluntary redundancy, then the company is not obligated to give you anything.

“They pay you out and you’re on your own.”

It believed there were up to 1000 vacancies within the company’s fleet of Central Queensland projects.

The 10-page missive spells out that the closure of Norwich Park had nothing to do with industrial action nor that BMA was considering selling the site.

BMA did not respond to questions before deadline, but has previously detailed that it would redeploy as many workers as possible to its other projects.

 

BMA SAID

Will BMA make Norwich Park a contractor-operated mine?

At this stage there are no plans to operate Norwich Park mine as a contractor operation.

Why is BMA spending millions on new sites, yet is saying that Norwich Park is uneconomical?

Each of BMA’s assets is assessed in its own right. Each mine needs to stand on its own two feet.

Can we read and reply to the review of Norwich Park?

The Strategic Review is an internal management process which is commercially sensitive.

Is BMA going to sell the site? If so, and I am made redundant, can I apply to work for the new operator?

BMA has no current plans to sell Norwich Park mine.

Shock closure of Norwich Park mine sends powerful warning to unions

THE shock closure of the Norwich Park mine sends a powerful warning to unions that mining giants can shut sites even in a resource boom.

Morningstar analyst Mark Taylor said it was also “an easy way” to send a “powerful” message to unions who were in a pay dispute for the past 16 months with strikes.

“If you’re closing down an operation that’s not particularly profitable for you, and if you’re copping grief from unions, it’s kind of an easy way to send a message to them that mines can shut down if they’re not profitable,” he told The Courier-Mail.

The comment comes as CFMEU mining and energy division district president Stephen Smyth raised suspicion over the closure given ongoing strikes at the site.

“I’d hate to think this is the length they’d go to … shut a mine down to show them,” he said. “If it is, it’s a pretty low act to do. For BHP, this is probably simply a business transaction.”

 Mr Smyth said the mine had functioned when the coal price was a lot lower than it was now.

Last night, a BHP spokeswoman denied the allegations, stating the motives behind the mine closure were in the open.

“We talked about it losing money for months now,” the spokeswoman said.

“It was affected by the wet weather in Queensland last year and obviously the higher-cost environment that we’re all currently experiencing across the industry.

“Obviously industrial action hasn’t helped the situation but the cause is basically the economic viability of the operation given the wet weather and the higher-cost environment.”

She reaffirmed that BMA was ceasing production across the mine and would “seek to redeploy employees to our other mines”.

Mr Taylor said a loss-making mine was more likely to stay open in a boom “because you’re going to be making money out of it”.

But he said if prices went off, it would no longer be profitable and become the first to shut.

He said coal prices had been declining “for a while” to around US$200 a tonne.

Queensland Premier Campbell Newman yesterday blamed the Federal Government’s workplace policies for the closure of Norwich Park mine.

“Prime Minister (Julia Gillard) and her cabinet need to take responsibility for creating an environment where we’re seeing a break-out in industrial action,” he said.

“I ask the company concerned to think long and hard about what they’re doing.

” … the very future of the community of Dysart is at stake.”

–  additional reporting AAP

Town fears mass exodus after mine closure

Residents in the central Queensland town of Dysart say they face an uncertain future after BHP-Mitsubishi Alliance (BMA) announced it was closing a nearby mine.

BMA says it is stopping operations at Norwich Park coal mine because of a combination of unprofitability and recent industrial action.

BHP boss Marius Kloppers says it was a difficult decision, but the company has a policy of shutting down mines that are making a loss.

“What is clear is that in a number of our commodities, we’ve seen prices come down, particularly in the processing-oriented activities like aluminium, manganese metal, nickel and so on which, combined with high costs, is making life difficult for some of those operations.”

While the mining giant says it will try and redeploy all 1,400 staff, that may not help Dysart where locals fear the closure will force people to leave town.

Dysart has a permanent population of about 5,000, but Margaret McDowell, from the Community Support Group, says the local economy is both distorted by and reliant upon the mining industry.

“A house that goes between $500,000 and $600,000, and your rent, you can pay up to $2,000 a week rent, so there isn’t any affordable housing in Dysart and that is why a lot of our services and the smaller businesses rely on partners of workers in the mines,” she said.

“That is the only way they can afford to live here.”

Ms McDowall says any loss of mine workers from the town will also affect local jobs.

“Workers in the hospital, workers in the schools are partners of people working in the mines,” she said.

Jason Moffatt, who owns the Dysart Bakery, says people are trying to work out what the closure will mean for them and their families.

“I think the worry for a lot of people is that it’s going to have a detrimental effect on sporting clubs and so forth if people decide to move away,” he said.

“The reaction that we’re getting here is that BMA are going to shift their workers into Saraji and Peak Downs, but whether that’s true or not I don’t know.

“But you take one of the mines out and it has an effect on every business in town.”

Mayor Cedric Marshall says local businesses will feel the effects of the closure at Norwich Park.

“It depends on what happens with redeployment and the redundancy packages they offer how many actually move out of Dysart. We won’t know that for some time of course,” he said.

Under pressure

BMA’s asset president Steve Dumble says Norwich Park has been under a lot of pressure in recent times.

“We’ve had some very difficult periods during the last wet season and a lot of damage was incurred at that mine,” he said.

“That has had a big impact on production. We’ve been investing heavily to try to recover there, but in recent times I guess the combination of weak demand, falling prices, those high costs and also some of the impacts on production, particularly from the industrial action taken by the unions, has meant that both our revenue and our costs have both gone in the wrong direction unfortunately.”

But he indicated BMA will not be sacking anyone.

“If there is a silver lining to the Norwich Park situation, it is that there is significant demand for skilled people in this industry. We’ve got a number of opportunities and vacancies across our business where we will seek to redeploy all of our people,” he said.

BMA says it will suffer from the closure because it has breached supply contracts.

Mr Dumble says to avoid liability BMA has triggered the force majeure clause, meaning an unforeseen act has occurred – something it was forced to do last year following the floods.

“Whenever we declare force majeure it is not helpful for our reputation as a reliable supplier,” he said.

“That said, the market though is very weak at the moment and the capacity on the supply side is strong and so it is probably one of those times when it has the least likely impact on customers.”

Doubts

Jim Valery from the mining union says it is an unusual use of force majeure.

“Force majeure is something I’ve always believed to be like an act of God, heavy weather or things like that. The industrial or the agreement discussions is something they very much have control over,” he said.

He also takes issue with industrial action being blamed as one of the reasons for shutting down Norwich Park.

“We would certainly hope that Steve isn’t trying to pay the pitch that isn’t correct. Industrial action has been happening across seven pits. To single out about a mine closure, there has to be some doubt about the reality of what has been said,” he said.

“It hasn’t impacted on the other pits. We certainly hope that it isn’t being bandied about as a way to create further disturbances in further agreement talks at the moment.”

Mr Dumble says it is the union that is the problem.

“This industrial dispute is about on one hand a company that wants to build that better, more competitive future, and a union that wants to stay stuck in the past,” he said.

The next milestone in the industrial dispute comes on May 10 when a ballot of the enterprise bargaining agreement is scheduled to be held.

Boom to bust in Queensland town of Dysart undermined

THEY have weathered the booms and busts in Dysart, along with all the worries that come with coal mining.

But the Norwich Park mine was one of the reasons the town was built on a baking plain in central west Queensland and for workers such as diesel fitter Dean Thacker, married to a local, it provided a degree of security in an increasingly unpredictable world.

Until yesterday.

As the community came to grips with the move by BHP Billiton to shut the mine in the midst of a coal boom, Mr Thacker and wife Kamia were looking anxiously to their future.

“We’re here as a family and this is where we want to live and work,” Mr Thacker said.

“We’re going to lose a lot of families we socialise with and a lot of friends.”

While BHP Billiton assured the 1400 affected staff and contractors that as many of them as possible would be redeployed to the other central Queensland coal mines it operates in partnership with the Mitsubishi group, recriminations erupted over the closure. As union leaders from the CFMEU accused the company of seizing on industrial action at the BMA sites as an excuse to cut its losses at Norwich Park, Queensland Premier Campbell Newman attacked Julia Gillard for “creating an environment” in which industrial disputes could erupt.

The company has cited the impact of floods, rising production costs and softening coal prices as the principal reasons for the mine closure, but it acknowledges that rolling strikes organised by the CFMEU and two other unions played their part.

Like most residents of this company town, 1000km northwest of Brisbane, Mr Thacker doesn’t want to buy into the blame game.

But he worries about the impact the shutdown will have on his comfortable life with Kamia, 35, and their boys Zeke, 7, and Quinn, 5, in their BMA-provided house. Non-company homes in Dysart command prices of up to $600,000 and rent for $2000 a week.

Then there is the boxing club that he poured his heart and soul into setting up. “To see it go down the gurgler would just crush me,” said Mr Thacker, 34. Mrs Thacker, who works in the local pharmacy, said they had decided to stay on in Dysart even though the cost of living was higher than it would be if her husband commuted from Mackay, three hours away.

The drive-in, drive-out lifestyle was not for them, she said. “We didn’t have kids for me to be like a single mum, with him on a great wage. We wanted to be together,” Mrs Thacker said.

Dysart Community Support Group community development officer Margaret McDowall feared the “ripple effect” from the mine closure. She has lived in the town for 32 years and her husband, son and son-in-law are employed by BMA.

“I have seen it go through ups and downs before but nothing like this,” she said.

Veteran Norwich Park worker Kevin Brown, 53, said its closure would be “another tear in the fabric” of the community.

“A lot of people feel very insecure,” Mr Brown said. “I just hope it works out for the younger people, the young families.”

Supermarket manager Terri Smedes-Bagley said businesses such as hers would be hit. “Of course it will affect us,” she said.

CFMEU Queensland president Stephen Smyth refused to back away from the industrial action, which was being stepped up last night with a 36-hour stoppage at BMA’s Queensland mines including Norwich Park.

BHP, which manages the operation, had told the union the decision to cease production was taken on wholly financial grounds, he said.

“They told us fairly and squarely it was an economic decision because they’re losing money,” Mr Smyth said. “I see BHP treating us as a business transaction but to our members and people in the community it is a huge impact on their lives. The question is, now we’re in a boom – what happens in a bust?”

While insisting that federal Labor was primarily to blame, Mr Newman appealed to BHP and the unions to “think long and hard” about continuing the dispute that had brought Norwich Park to the brink, and Dysart along with it.

Ms Gillard said her sympathy was with those who faced losing their jobs and it was not the time for “the playing of politics”.

Dysart is a primarily Labor-voting town of about 3500 but this was checked at the election that delivered power to the LNP.

The town is in the state seat of Mirani, which until March 24 was the LNP’s third-most marginal seat in Queensland. Labor’s vote at the Dysart booth crashed from 70.38 per cent in 2009 to 50.51 per cent, with most of that vote seemingly going to Bob Katter’s Australian Party, which picked up a creditable 20.65 per cent.

Mining strong despite pit closure: Wong

Federal Finance Minister Penny Wong says investment in the mining sector is still strong, despite BHP Billiton closing an unprofitable coal mine in central Queensland.

BHP on Wednesday announced its joint venture company with Japan’s Mitsubishi, BHP Mitsubishi Alliance, would stop production at the Norwich Park coking coal mine, southeast of Dysart.

The closure brings to an end 16 months of a bitter pay dispute accompanied by strikes and rolling stoppages.

The industrial action affected all seven of BMA’s Bowen Basin mines and had combined with flooding to hamper production, BHP Billiton said.

Michael Roche, from the Queensland Resources Council, said the news was a reminder to politicians and interest groups that “it is simply not possible to keep loading more and more costs on to mining operations without consequences”.

Senator Wong said the closure had more to do with a lack of profitability and the floods than government policies.

“Since the mining tax was announced (and) since the carbon price was announced we’ve still seen continued investment in mining,” she told Sky News on Thursday.

“In fact, over three years I think it’s gone from $47 billion to $120 billion projected in the current year or the next year.

“That’s a very substantial investment and it does fly in the face of people who suggest that these policy settings are deterring investment.”

Opposition resources spokesman Ian Macfarlane said the closure was “irrefutable evidence that the Australian mining sector simply cannot continue to absorb blows from unions and a government that sees it as an indestructible cash cow”.

“In the weeks ahead, the mining industry will be burdened with the two greatest drags on its profitability, as the Gillard government’s carbon tax and mining tax come into effect,” he said in a statement.

“Both of these taxes will undercut the international competitiveness of our mining sector.

Media reports said 1400 jobs are at risk because of the mine’s closure.

http://news.ninemsn.com.au/article.aspx?id=8450202

Coal mine closure ‘presents $1b export threat’

The Queensland Resources Council warns about $1 billion of coal exports are under threat because of BHP-Billiton Mitsubishi Alliance’s (BMA) decision to halt production at one of its mines.

BMA will stop operations at its Norwich Park mine near Dysart in central Queensland next month, affecting about 1,300 workers.

The company says last year’s floods, cost increases, lower coal prices and recent industrial action are to blame.

Queensland Resources Council chief executive Michael Roche says the decision will have a severe impact on the industry.

“Well, 4 million tonnes of coking coal is a significant amount of money that’ll be lost to our coal exports,” he said.

“So at current coal prices you’re talking about the best part of $1 billion of exports that won’t occur if this mine was to be closed for an entire year.

“This is clearly bad news for the affected workers, their families and of course the Dysart community.”

BMA says the widespread belief in an Australian mining industry boom is misplaced.

BMA asset president Stephen Dumble says the company’s other mines remain profitable.

“Norwich Park, unfortunately for a range of circumstances, was the most exposed to some of those commercial pressures and in that sense is somewhat of an isolated case,” he said.

Queensland Treasurer Tim Nicholls says the mine’s closure is among several developments likely to prompt a fall in mining royalties.

“It’s too early to say yet what the impact will be and whether it’s all due to the closure of this mine or not,” he said.

“We know mining royalties have been impacted by the floods, both last year and again earlier this year, so we’re expecting that, as well as also increases in the Australian dollar and and reductions in markets from some of our major overseas customers.”

The shutdown comes amid a long-running enterprise bargaining dispute between BHP and workers at seven central Queensland mines.

A Fair Work Australia hearing addressed the matter yesterday and will sit again next week.

The Construction, Forestry, Mining and Energy Union (CFMEU) says it does not believe industrial action played a major part in the decision to halt operations at the mine.

 

The CFMEU’s Steve Smyth says the union will not change its tactics.

“No we won’t … at the end of the day, we’re stuck into a full-on dispute in relation to a replacement agreement but our main focus with Norwich Park is ensuring that none of our members are left high and dry and ensure that whatever decision they make … that they are happy with it and get all the assistance and help that we can [provide],” he said.

‘No big shock’

Minelife senior resource analyst Gavin Wendt says the closure of the mine is “no big shock”.

He says coal miners have been struggling.

“To think it’s just easy money out there for the miners is probably a misnomer,” he said.

“Commodity prices have come off significantly over the last 12 months and that straight away has impact [on] companies’ bottom lines.

“At the same time there are rising cost pressures.”

Mr Wendt says the BMA mine was struggling to remain profitable.

“Operations like Norwich Park – older operations – are very much exposed to the vagaries of the market,” he said.

“And it’s these older operations that BHP and other companies like them would be looking at closing down, at least temporarily until things can improve.”

‘Worry’

The Mayor of the Isaac Regional Council, Cedric Marshall, says people knew there were problems with the mine but did not expect it to close.

“Well I think it would be a shock around town,” he said.

“Unfortunately some families [are] away on holidays with their children because of school holidays, so it will be a shock to them.

“It’s not good news for the community. I wouldn’t say it’s unexpected, there have been rumblings for quite some time now that they might restructure Norwich Park but as far as closing it … it’s come as a bit of a shock.”

Jason Moffatt, who owns the Dysart Bakery, says people are trying to work out what the closure will mean for them and their families.

“I think the worry for a lot of people is that it’s going to have a detrimental effect on sporting clubs and so forth if people decide to move away,” he said.

“The reaction that we’re getting here is that BMA are going to shift their workers into Saraji and Peak Downs but whether that’s true or not I don’t know.

“But you take one of the mines out and it has an effect on every business in town.”

http://www.abc.net.au/news/2012-04-12/coal-mine-closure-presents-bilion-dollar-export-threat/3944854/?site=newcastle

BHP Billiton to close Norwich Park mine

BHP Billiton will shut down its smallest and costliest Queensland coking coal mine because of flooding, falling prices, higher costs and union action that has cut production across its mines.

The move will potentially put 1500 contractors and permanent employees out of work at the Norwich Park mine, near the town of Dysart, although the company said it was looking at redeploying as many of them as possible.

http://www.theaustralian.com.au/business/mining-energy/bhp-billiton-to-close-norwich-park-mine/story-e6frg9df-1226323935644

 

BHP Billiton Mitsubishi Alliance (BMA) will cease production at its Norwich Park coking coal mine in Queensland’s Bowen Basin indefinitely.

The closure follows a 15 month dispute with the Construction, Forestry, Mining and Energy Union over a new wage agreement and as the mine battles to remain financially viable.

In a statement, the mining giant said the decision to cease production followed a seven week review of the mine’s viability.

BMA Asset President Stephen Dumble said that while recent industrial action has had an impact on production, the mine has been unprofitable for a number of months.

“This decision was not made lightly. However, the impact of last year’s floods, combined with lower coal prices and high costs, has resulted in an operation that is not currently viable,” he said.

Morningstar analyst Mark Taylor said the coking coal price had been drifting downwards to around $US200 per tonne after peaking at more than $US300 a tonne last year.

The price fall came despite tighter supply due to the Queensland floods and was a result of a dip in demand.

“You don’t need much of decline in demand to take heat out of the market,” Mr Taylor said.

Mr Taylor said the closure of Norwich Park made economic sense but also sent a powerful message to the mining union after more than 16 months of unproductive pay talks marred by strikes and rolling stoppages.

“They (BHP Billiton) could argue simply that it’s not generating a satisfactory return but it’s also a convenient way to let some of those other forces at work know that there are consequences: it’s not an endless, golden egg-laying goose,” Mr Taylor told AAP.

“The mine is probably one of their highest cost ones and is causing them grief on multiple fronts, and they can allocate capital better elsewhere, particularly if they don’t have a friendly workforce.”

He said it made sense for BHP to make quick decisions about unprofitable assets because it had major expenditure on the cards with the expansions of the Escondida copper mine in Chile and Olympic Dam copper, gold and uranium mine in South Australia.

“They need to focus on areas where can get the best outcome,” he said.

The company said it aimed to redeploy Norwich Park employees to BMA’s Saraji mine, south east of Moranbah, to enable them to remain residents of Dysart.

Earlier this month, BMA admitted to customers that it would not be able to meet its supply contracts due to the ongoing strike action and flooding in March.

More than 3500 workers had been involved in rolling stoppages amid protracted negotiations over the enterprise agreement.

According to the 2010 Register of Australian Mining, some 400 staff and contractors work at Norwich Park.

BHP Billiton shares closed 1.92 per cent lower at $33.59 against a benchmark index fall of 1.06 per cent.

http://www.businessspectator.com.au/bs.nsf/Article/BMA-to-close-Norwich-Park-coal-mine-pd20120411-T96WX?OpenDocument&src=hp5

Mine closure to hit us hard, community says

The closure of a central Queensland mine will have a ripple effect through the entire community of a nearby town, a local community organisation says.

BHP Billiton Mitsubishi Alliance yesterday said it would cease production of its loss-making Norwich Park mine, southeast of Dysart.

According to the 2010 Register of Australian Mining, some 400 staff and contractors work at Norwich Park.

Advertisement: Story continues below

The mine is one of two located near the mining town of Dysart.

The Dysart Community Support Group says its closure will affect the whole town.

‘‘Everyone is in shock at the moment,’’ community development officer Margaret McDowall said.

‘‘No one knows what they’re going to do next. They haven’t had time to really think about it.

‘‘I don’t know how many are going to be re-employed, but it doesn’t just affect the mine workers, it affects every business in town.’’

Ms McDowall says schools will lose teachers because many are partners of mine workers.

The housing market would suffer as families were forced to move away, she added.

‘‘It’s going to affect things everywhere,’’ she said.

BMA says the Norwich Park mine had been losing money for several months because of lower coal prices, higher costs and weaker output due to flooding.

BMA asset president Stephen Dumble said recent industrial action had also hampered production.

‘‘We understand that this decision will have a significant impact on our employees, their families and the Dysart community, and we are committed to supporting them during this period,’’ he said in a statement.

BHP said it aimed to redeploy Norwich Park employees to BMA’s Saraji mine, southeast of Moranbah, to enable them to remain residents of Dysart.

Mining union the CFMEU says it expects a formal briefing on the mine’s closure today.

The union’s mining and energy general secretary Andrew Vickers says he understood ongoing strike action was not a major factor in the mine’s closure.

He says BHP and the mining industry should be able to cater for workers who find themselves out of a job.

‘‘If BHP can be believed they currently have more vacancies at their existing mines than what they have surplus permanent employees at Norwich Park,’’ he said.

Meanwhile, BHP’s plan to bypass negotiations with the CFMEU and hold a postal ballot of its Bowen Basin mine workers on a new enterprise agreement has been delayed.

Fair Work Australia on Wednesday determined that concerns raised by the CFMEU about BHP’s bargaining conduct should be heard in full on April 17 to 19.

BHP has agreed to delay the ballot for a week, until Friday, April 20, according to the CFMEU.

Pay talks between BMA and its Bowen Basin miners have dragged on for more than 16 months, marred by strikes and rolling stoppages since February.

Union members at all seven affected mines will take co-ordinated industrial action from Thursday night through to Saturday, with individual mines taking additional sporadic stoppages.

The CFMEU has accused BMA of reneging on several terms of the new agreement.

Read more: http://www.smh.com.au/queensland/mine-closure-to-hit-us-hard-community-says-20120411-1wq8i.html