Energy / Resources

As you know we have long warned about this. We warned that China’s growth would slow and that even if it didn’t, its appetite for iron ore would. In print, in the press, here on our blog, and on TV and radio we have warned that mining would see its own ‘fiscal cliff’.
continue…

by Roger Montgomery Posted in Energy / Resources, Insightful Insights.

• 3 Comments
• save this article
• POSTED IN Energy / Resources, Insightful Insights

For some time now, we have been cautious about the prospects for listed EPC (Engineering, Procurement and Construction) contractors (mining services). And neither the recent rebound in share prices, nor the following RBA announcement, made last week by Christopher Kent, have done much to impact this view.
continue…

by Russell Muldoon Posted in Energy / Resources, Insightful Insights.

• save this article
• POSTED IN Energy / Resources, Insightful Insights

My fellow guest on Your Money Your Call, Christopher Joye, shot an email around that I thought you might be interested in…

While his article discusses the impact of a 5% devaluation of FX and gold reserves, history shows that a 5% positive revaluation is also a possibility that cannot be ruled out.
continue…

by Roger Montgomery Posted in Energy / Resources.

• 1 Comments
• save this article
• POSTED IN Energy / Resources

Earlier this week, the Council of Australian Governments (COAG) Reform Council said that the Commonwealth had now set up the “Independent Expert Scientific Committee on Coal Seam Gas and Large Mining Development” (IESC). This will give governments solid scientific advice on the potential effects of CSG and large mining developments on water resources. In the five years to 2010/11, CSG has increased from 2% to 11% of Australia’s total gas production (read the media release).
continue…

by David Buckland Posted in Energy / Resources, Insightful Insights.

• 1 Comments
• save this article
• POSTED IN Energy / Resources, Insightful Insights

I caught up with a few of my country friends over Easter. One conversation topic that kept coming up was the current approval process for the coal seam gas industry. To say that they are furious about it would be an understatement.

They quoted cases where bore water, which has been running for decades, has suddenly dried up within months of coal seam gas production commencing nearby. So what’s going on?

continue…

by David Buckland Posted in Energy / Resources, Insightful Insights.

• 1 Comments
• save this article
• POSTED IN Energy / Resources, Insightful Insights

In this interview on ABC1’s ‘The Business’, Roger discusses with Ticky Fullerton why he is virtually certain that the Mining Services industry is facing disaster, and he also is highly sceptical about Telstra’s (TLS) prospects. Watch here.

This program was broadcast 27 March 2013.

by Roger Montgomery Posted in Energy / Resources, Technology & Telecommunications, TV Appearances.

• save this article
• POSTED IN Energy / Resources, Technology & Telecommunications, TV Appearances

In this edition of Ross Greenwood’s program on 2GB, Roger discusses the issue of finding quality that’s cheap and valuing projects in the resources sector, as well as answering listeners’ questions on Lynas Corp. Listen here.

by Roger Montgomery Posted in Energy / Resources, Radio.

• save this article
• POSTED IN Energy / Resources, Radio

Last week, The Australian Financial Review’s Angus Grigg and Jamie Feed wrote a neat summary of the growing cries of concerns around China’s economy.

We summarise as follows:

– Dong Tao, Chief Regional Economist at Credit Suisse says there is “no good news to report on China…the Chinese economy is struggling”
– Greg Lilleyman, RIO’s President of Pilbara Iron Ore Operations says “additional exports and a slowing in steel demand growth would hurt the price in tens second half of the year”
– Andy Xie says “This is not good news for Australia” and “the Australian housing market and dollar were vulnerable to slowing growth in CHina, which could fall as low as 5 per cent in coming years”
continue…

by Roger Montgomery Posted in Economics, Energy / Resources, Insightful Insights.

• save this article
• POSTED IN Economics, Energy / Resources, Insightful Insights

I noted with interest Anton Tagliaferro’s comments in today’s AFR, lamenting the apparent lack of shareholder focus shown by boards of directors in the resources and energy sectors. Reading these comments, it struck me that the boards of these companies are no doubt plagued by the same issues that confound value investors looking at these types of businesses.

As value investors, we aim to acquire an interest in a business when we can see that the value of the business is greater than the price we need to pay to own it. At Montgomery, we are concerned also with quality and a host of other factors, but let’s focus for the moment on value.
continue…

by Tim Kelley Posted in Energy / Resources, Insightful Insights, Investing Education.

• 2 Comments
• save this article
• POSTED IN Energy / Resources, Insightful Insights, Investing Education

As you know we have long been short Iron Ore. That was clever! “…long been short…”?

Jokes aside, many investors are still buying mining and mining services companies. Their reasoning is that they have underperformed the financials and non resource cyclicals. The rationale is that because they have under performed it is time for them to catch up. Well as you know, I think that is a bit like entering a Formula 1 race with a billy kart and a couple of friends to give you a push. Just because the billy-kart has lost the last 1000 races doesn’t mean its time for it to win. An F1 car accelerates from zero to 150kmh in 1.4 seconds. No matter how hard your friends push, your billy cart simply isn’t going to match it.
continue…

by Roger Montgomery Posted in Energy / Resources, Insightful Insights.

• 16 Comments
• save this article
• POSTED IN Energy / Resources, Insightful Insights