Mining Boom 2.0

14 Comments

1. 

   jimbo james
   June 3, 2015 at 7:05 am:

   Huge fan of that chart, especially when overlaid with Stapledon’s house price index. The passage of the two previous largest peaks in ’72 and ’83 had a well defined impact on house prices, with a consistent lag of about 4.5 years i.e. house prices topped out on average 4.5 years after the mining peak. Interesting times come 2017 if history decides to rhyme, more so when you consider the fact that this boom puts the previous two to shame. Always a good read Roger, cheers.

   • 

     Roger Montgomery
     June 4, 2015 at 11:59 pm:

     Darn it Jimbo, I am sure there are some bargains hunters who were hoping they wouldn’t have to wait that long.

2. 

   Gaveen Jayarajan
   May 24, 2015 at 1:09 pm:

   Just wondering what your thoughts are on which other sectors/industries have been indirectly supported by the mining boom and may be ‘collateral damage’ so to speak of the downturn in this sector? Other than mining services? Banks perhaps who have lent money to fund mining projects?

   • 

     Roger Montgomery
     May 25, 2015 at 12:29 am:

     Wondering if the blog community might like to give you some insights Gaveen?

3. 

   matthew.connors2
   May 22, 2015 at 5:44 pm:

   If China keeps growing at 7%ish thats a massive demand on its own.. a doubling of its economy every 14 years…two chinas by 2012+14=2026 is still very substantial demand… our future lies in the outcome of China and to some extent India… If China doubles it GDP by 2026 I can’t see us suffering too much despite a short term correction right now. I recently went to China and the inefficiencies are frightening…people mowing large scale lawns with hand held scissors and doing it slowly. … as they develop the demand may be staggering.

   • 

     Roger Montgomery
     May 22, 2015 at 6:09 pm:

     That is interesting, big shocks for us however if growth slows to 4% or 5% while our iron ore supply (and that of Brazil) keeps climbing..

4. 

   garry howlett
   May 21, 2015 at 8:02 pm:

   Yes its ironic that the miners and resources that created the boom and wealth, will now have such a detrimental effect on the country.
   Mining company’s through increased employment put increasing pressure on wages inturn making us uncompetitive, which helped in the destruction of our manufacturing industry.
   Resource prices pushed up our terms of trade, elevating AUD$, putting pressure on tourism and exports.
   They created an overnight industry of “mining services” company’s which now has now seen billions$ lost, which has caused mayhem for management, staff and shareholders.
   The boom now over they layoff the staff and create unemployment.
   And what do we have to show for one off the greatest booms of our time???

   • 

     Roger Montgomery
     May 22, 2015 at 6:16 pm:

     You can thank those brilliant planners and strategists keeping the cabinet seats warm in Canberra.

5. 

   Patrick Poke
   May 21, 2015 at 10:52 am:

   One can never be sure, but the fundamentals of the industries suggest that zinc, uranium, copper, nickel and gold are all potential candidates to fill the gap. I can’t imagine any single one of those could provide the scale of iron or LNG, but if a few of them take off it’s possible.

6. 

   John E
   May 21, 2015 at 10:50 am:

   Plus companies like ORG and STO have bet the house on LNG. ORG’s debt is around $10B which is massive for a company of it’s size.

   Solar generation is starting to gain traction and battery storage isn’t far away.

   So lot’s to play out in this space beyond just the mining side.

7. 

   craig-campbell
   May 21, 2015 at 9:59 am:

   Will be interesting to see the effect this has on housing markets / population movements in resource states, or are we starting to see this already?…

   Nice perspective Ben.

   • 

     Roger Montgomery
     May 21, 2015 at 10:40 am:

     It’s already happening SA, NT and WA are slumping. Interesting QLD less so.

     • 

       Chris
       May 26, 2015 at 7:59 pm:

       Roger, despite popular spruiking to the contrary by the State Government, SA never had a mining boom ! It just didn’t happen.

       The State was hinged purely on the Olympic Dam expansion that never happened – mainly because the infrastructure that is needed for it (esp. ports and roads) just isn’t there right now, and even if it was, the sheer amount that it will need just to get it off the ground (in terms of consumables such as diesel, cement, steel etc.) cannot be met from current supply in the State, let alone Australia…once you switch the machine on, you cannot just ‘turn it off’.

       Two other iron ore operations in the Far North have now been mothballed and really, were marginal at best anyway.

       I put this to you – there was no massive exodus of people to the mines and there was no boom in house prices in Adelaide. Maybe in places around Andamooka / Roxby Downs, but now those places are suffering massive losses and 10% vacancy rates.

     • 

       Roger Montgomery
       May 27, 2015 at 8:37 am:

       Thanks Chris. APpreciate the insights.