The end of the mining boom

mikethecat

Anybody here working in mining - how are the companies you work for faring at the moment?

Things in Queensland (coal) are looking pretty bad right now and there seems to be a lot of cut backs and lay offs on the way.

catbear

I don't work directly in mining but I would be affected by a long term lull.
I had always thought that China was Aus biggest client for coal but it's actually Japan and they've recently renewed their commitment to shut down their nuke plants by 2030 so hopefully the coal price dip is just a temporary thing.

Iron ore is back up around $100 a tonne after going as low as $80, a year ago it was $180 so you can see how Fortescue are struggling. Chinas leadership changes in October so we'll know more about their plans, if any, for further structural investment.

The strong Aus dollar hasn't helped but on the plus side a drop in commodity prices is actually a good thing for the global economy.

Zambia

Damn it .... nowhere left to run. :eek:

catbear

@zambia

ellaq

The boom is over for now but it isn't a bust. Just returning to normal levels for a while. I would imagine the construction side has been hardest hit. Husband is a tradie and works directly in mining. He works for an OEM who contract him out so he goes where the work is. Heaps of jobs advertised in his sector but mostly contract/labour hire these days.

Friends have lost their jobs but they are consultants and these positions are often the first to go. And most of their work was from FMG. And I don't think Roy Hill has finance approved yet.

Sundy

The iron ore boom is over alright but there are plenty of other projects on the go. I know of a few green (or red if you prefer) field gold projects on the go. They dont have the same man power requirements but mining is far from finished.

Half the problem with FMG is the grade of their ore, and the massive inefficiencies in operations. Rio & bhp are currently investing lots in making their sites more efficient. Its not good for employment but its way more sustainable.

irishmover

Central Queensland Met. Coal is on the decline for now.

Majority of OC engineers let go on one of the BMA sites. A lot of construction projects halting. One of the two surveyors told they'll be let go. Contracting company I do laser scanning for who extract the coal out of the pit on the same BMA site are shutting down. Not good, not good at all!

As I said on here a few weeks ago Rio site across the road from that BMA site are downsizing by 30%.

Company I work for is involved in a lot more than just coal so should be alright but still not good.

But, talking to some seasoned CQ miners they've said this isn't new, never really been a boom it's just been a continuous fluctuation over the last 30 years or so. Sometimes good, sometimes bad. Make hay when the sun shines and all that.

seachto7

"We do believe the property market has bottomed out, and there are the first signs of green shoots"

e04bf0c8

It is not a bust as such but more just part of the cycle of things over here. Things couldn't keep going the way they were that was all. And it just looks like FMG is the victim this time round. And I'm sure in 10 years or so there will be another company who does not exist at the minute, who will be about to go out of business! And yes I do mean FMG is about to go out of business. That internal memo that was sent around today is a clear sign if you needed one!!!

catbear

The bigger companies have the cash to ride it out but FMG were too leveraged and dependent on short term funding (now where have we seen that happen before?)
Andrew Forests primary goal was to preserve his stake in the company, selling more shares would have diluted his percentage of the stock. We may see the end of FMG but it ain't the end of mining.

Sundy

To those who though FMG was was about to disappear.

FMG to extend loans


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Fortescue Metals Group has secured a new $US4.5 billion ($A4.31 billion) credit facility which it will use to refinance its looming bank debts.

The troubled iron ore miner had been in negotiations with its lenders about potential waivers of its bank facilities, and today said the new credit, to be provided by Credit Suisse and JP Morgan, would extend the maturity profile of its debts.


"This action, together with our previously announced measures, will continue to build on Fortescue’s profitability, liquidity and above all, removes uncertainty around our financing arrangements,” chief executive Nev Power said in a statement.

Concerns about FMG's ability to pay back its gross debt of about $US9 billion ($A8.57 billion) had come to a head in recent days with the iron ore spot price falling below $US100 ($A95.87).

Some analysts said they believed the price fall had left the company no longer profitable.

"Fortescue has moved quickly to ensure its capital structure can withstand prolonged market volatility,” Mr Power said.

The company also said it had received strong interest from a range of parties about partnering with FMG in some of its assets.

The company would evaluate these approaches, but with the new five-year credit facility in place such transactions were no longer required, FMG said.

FMG has already sold a power station at one of its mines for $300 million.

It also recently announced the delaying of $US1.6 billion ($A1.53 billion) of capital expenditure, 1,000 job cuts and a reduction in operational costs.

FMG shares have been in a trading halt since Friday, and will resume trade when the share market opens at 1000 AEST on Tuesday

Slidey

Huh, all sorts of rumours floating around the FMG site I work on.

The next couple of weeks will tell the tale I suppose