There is no denying that Central Queenslands future prosperity is closely linked to the coal mining industry. However the fundamentals to Australia's potential future coal mining industry are strong. What is wrong about it from my perspective at the moment is the following 4 points.
1. The Australian Dollar is too high. Partly due to the exponential capital being invested at the moment.
2. The unions are struggling to get along with the corporations. Disputes that have been going on for two years now have gone too far for my belief. Im not going to get into a debate about what is right or wrong. However my point of view is that it is no ones right to have a job. Therefore our jobs and industries are not fail proof. We are putting to much pressure on the business environment in this country.
3. Two new taxes have been introduced, a) MRRT b) carbon tax. It always takes time for people and industries to see how this will, in reality, affect them. Leading up to an election, the large corporations with so much at risk always attempt to have their political sway buy affecting the environments and aiming to have people vote for a party which the industries believe will benefit them long into thw future.
4. The cost base of our mining industries are exponential. In fact, just last week BHP made an announcement that it was time to be more conservative with their operating expenditure. When commodity prices go sky high, the miners will do whatever it takes to get the stuff out of the ground as quickly as possible. most of the time, oblivious to costs.
2. The unions are struggling to get along with the corporations. Disputes that have been going on for two years now have gone too far for my belief. Im not going to get into a debate about what is right or wrong. However my point of view is that it is no ones right to have a job. Therefore our jobs and industries are not fail proof. We are putting to much pressure on the business environment in this country.
3. Two new taxes have been introduced, a) MRRT b) carbon tax. It always takes time for people and industries to see how this will, in reality, affect them. Leading up to an election, the large corporations with so much at risk always attempt to have their political sway buy affecting the environments and aiming to have people vote for a party which the industries believe will benefit them long into thw future.
4. The cost base of our mining industries are exponential. In fact, just last week BHP made an announcement that it was time to be more conservative with their operating expenditure. When commodity prices go sky high, the miners will do whatever it takes to get the stuff out of the ground as quickly as possible. most of the time, oblivious to costs.
this is summed up in a statement from BHP.
"While our resource base in Queensland is very high quality, the heavy cost of taxes, royalties, declining productivity and a strong Australian dollar means that further investment to grow these operations is much less likely," BHP CEO Marius Kloppers said in notes for a speech in Brisbane.
"While our resource base in Queensland is very high quality, the heavy cost of taxes, royalties, declining productivity and a strong Australian dollar means that further investment to grow these operations is much less likely," BHP CEO Marius Kloppers said in notes for a speech in Brisbane.
When all of the 4 factors sort themselves out to some extent, we will be back on track. times like these have happened before, and they will resolve themselves, and most likely happen again.
Back to Emerald. It will also be the hub for many future projects, which will, at some point, go ahead. I would recommend for everyone to due a lot of due diligence into the mine closures at present as there is a lot to be understood about them.
As investors follow each other, i believe we will not see many new properties being built from July next year. This will, as it has in the past, provide time for the market to soak up an increase in rental properties which have been bought, usually at inflated prices, to investors who jump on board with the hype without understanding the market fundamentals or even its short, medium and long term outlook. This will see rents increase when, inevitably, there is limited supply and high demand, and investors will, once again, push the market even higher than the average.
Luckily, yesterday (22/10/2012) the majority of BMA's 3000 strong workforce voted in favour of the latest employment agreement. ending a 2 year long dispute, Thats one problem solved, now for the other three!
