resources

Has the mining boom ended?

The Australian treasurer was quite adamant recently in saying that the mining boom still had a long way to run.  Perhaps he is correct but let’s look at the facts.

China has slowed.  Despite the economic forecast, China has surplus capacity with output exceeding sales in many industries; its PMI has fallen below 50, indicting a slowing economy.  Of course this was evident from technical analysis of the Shanghai Composite months ago see http://aust-investor.com/tag/china/

Aside from the China problem, falling commodity prices now put real pressure on our mining companies.  The falling price of iron ore, now close to $90, a ton is critical for our major miners and we are now seeing cancelled or deferred projects and retrenchment of staff.  BHP has deferred Olympic Dam and closed the Gregory coal mine.  Xstrata has axed 600 Australian jobs across NSW and QLD.… Continue reading

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