Hi All,
I know we've got a few threads on mining influenced areas and a variety of topics have been discussed….
However, I know some of us do have property interests that are going to be directly affected by these immense projects occurring shortly in the Galilee Basin.
So, with that said I thought I'd kick a thread off for us to share specific information on a variety of issues that may be of interest specifically to investors exposed to this market.
Hancock GVK – Point of no return.
http://www.bloomberg.com/video/88691582-asia-extremely-attractive-for-hancock-coal.html
Jack
It's like deja vue Rio and BHP 18 months ago all talking up their book. When you have companies like Xtrada pulling back you have to ask yourself why GVK think they know what they're doing.
The problem with current projects like this is that in terms of RE you really can't consider it any more than a spec play. I think anyone going in for the long haul is absolutely playing with fire.
China has some massive problems with energy and especially coal. They've capped imports so there's unlikely to be any real growth. India has some serious economic and political problems to get past before I could believe their growth story. There GDP may be high but I tend to think their figures are as reliable as the Chinese. The Emerging market theme gets done to death like its some sort of savior. SEA EM's are tiny and highly dependent on established economies for growth. Countries like Malaysia and Thailand have substantial percentages of their GDP generated by foreign companies who at this point are struggling in most markets that matter.
If global markets and conditions where more stable and there where some healthy growth centers driving or supporting economic growth I could go with the G Basin as a reasonable RE risk but I think the risk factor is high and consequently returns would need to reflect that.
It's the kinda place that could give an investor ulcers and grey hair.
Is it going to a new Surat Basin in terms of property investment? Can we expect growth akin to what Chinchilla has experienced in Surat Basin?
I don't think you can compare the two, (Surat and Galilee Basins), since they are different industries, (gas vs coal), at different stages/cycles, requiring different work forces. Whilst coal has seen to be dependent, (especially of late), on it's price as a commodity and perceived demand, gas is still in it's construction phase, so the real measure will be when construction of the pipeline and Curtis Island is completed. Even then, as the LNG industry takes off, it will still be driven largely by price and demand but with the key difference of requiring less ongoing workforce as coal is more labour intensive. Emerald's market softened when the coal price and demand dropped, projects were delayed/cancelled and contractors left town. Like the price of oil, once the demand increases within a couple years, (stemming from current reduced supply levels), the coal price will increase and the market will rise again. My 2 bed, 2bth apartment in Emerald currently rents for $400/week and that's when the market is down. These projects when they start will bring increased demand and the up and down cycle of the markets will continue. It's a matter of interpreting it yourself and deciding if you want to take the ride.
Galilee coal mine gets State Government nod : http://www.abc.net.au/news/2013-05-31/galilee-coal-mine-gets-state-government-nod/4726622?section=business
Dubstep wrote:Galilee coal mine gets State Government nod : http://www.abc.net.au/news/2013-05-31/galilee-coal-mine-gets-state-government-nod/4726622?section=business Good news.
A few head winds at the moment but things just keep moving forward. Hopefully September will see some stability and much needed reduced sovereign risk.
Deputy Premier, Minister for State Development, Infrastructure and Planning
The Honourable Jeff Seeney
Tuesday, May 29, 2012
Alpha Coal Project given go-ahead
The Newman Government has given the green light to what will be one of Australia’s biggest mines, the $6.4 billion Alpha Coal Project in Queensland’s Galilee Basin.
Queensland’s Coordinator-General has provided conditional approval for the mine – the first in the untapped coal rich Galilee Basin.
Minister for State Development, Infrastructure and Planning Jeff Seeney welcomed the decision and said the project would produce significant economic benefits for the state and nation.
“There’ll be an estimated $11 billion boost to the economy during the mine’s three year construction phase. 80 per cent of that will be retained in Queensland,” Mr Seeney said.
“Once operational, Queensland’s economy should see an economic boost of $1 billion per year from this mine alone.
“Australia can expect an $80 billion dollar rise in exports over the life of the mine.”
Mr Seeney said the Coordinator-General had approved the mine with strict conditions and the move was a major step towards opening up the Galilee Basin’s coal deposits.
“The proposal is for a 30 million tonnes per year open-cut coal mine and a 495km railway line from the mine to the Port of Abbot Point near Bowen,” he said.
The project is expected to generate up to 3600 construction jobs and 990 operational jobs.
The mine site is 130km south-west of Clermont and about 360km south-west of Mackay. The expected life of the mine is 30 years, with sufficient resources to potentially extend the project life beyond that time.
Despite the Coordinator-General completing Queensland’s assessment, the Federal Minister for Environment is yet to complete his assessment under Commonwealth environmental legislation.
“The Coordinator-General has thoroughly assessed Hancock Coal’s Environmental Impact Statement and associated materials, including 60 public submissions, and its Supplementary Environmental Impact Statement (SEIS),” Mr Seeney said.
Coordinator-General Barry Broe said his 393 page report contains 128 conditions.
“Conditions and recommendations in my report will ensure that impacts are well mitigated and managed through environmental management plans, environmental licences, development permits and a social impact management plan,” Mr Broe said.
The mine plan comprises six separate open-cut pits, with a total strike length of 24 km in a north-south direction.
Hancock Coal anticipates the construction period to occur between 2013 and 2016, subject to relevant approvals being granted for the project.
The Coordinator-General’s Report can be viewed at http://www.projects.industry.qld.gov.au
[ENDS] 29 May 2012
Media Contacts: John Wiseman – 0409 791 281
Kate Haddan – 0418 373 516
Adani Mining has applied for an environmental assessment from the federal government of a 300km rail line from Galilee Basin to Abbot Point Coal Terminal as it pushes ahead to develop its Carmichael coal mine.
http://www.miningaustralia.com.au/news/adani-applies-for-rail-from-galilee-to-abbot-point
Hey Jack, here's an article featuring in a couple of the local papers regarding the approval by the Queensland government. As we've discussed before, water is shaping up to be a contentious issue with the Galilee mines. Gina is noted for buying up water rights. Somebody needs to build a dam.
GVK HANCOCK COAL AND THIESS SIGN ALPHA COAL MINE OPERATIONS AGREEMENT. http://gvkhancockcoal.com/images/Documents/News/Alpha%20ESA%20Media%20Release%20Final.pdf
Bandanna Energy – Springsure
http://www.cqnews.com.au/news/bandanna-confident-it-has-addressed-local-concerns/1915347/
GVK Hancock Coal say high productivity and low costs are the reason they'll continue, regardless of market conditions….
http://www.miningaustralia.com.au/features/we-need-to-talk-about-kevin
Top 10 Best Buys report by property analyst Terry Ryder
Hi JT7 , I am currently working in the surat basin and surrounding areas, coal has hit it's peak and there's too much hype out there , be careful ! – I know lots of guys working in coal and it is a touchy subject , the CSG is the new kid on the block , if you or someone you know can visit the area you will see all the action from Dalby to Roma to Gladstone , it is buzzing , but you still need to do your due diligence , hope this helps in someway
.Reno101 wrote:Hi JT7 , I am currently working in the surat basin and surrounding areas, coal has hit it's peak and there's too much hype out there , be careful ! – I know lots of guys working in coal and it is a touchy subject , the CSG is the new kid on the block , if you or someone you know can visit the area you will see all the action from Dalby to Roma to Gladstone , it is buzzing , but you still need to do your due diligence , hope this helps in someway .I agree in part. There's no doubt about it, coal has certainly been hit hard this year and there has been pain but I think there are many issues involved including but not limited to companies improving production costs. The money being splashed around in the industry was ridiculous and unsustainable.
You are right in that CSG has really hit the ground running and is an exciting new industry. Commodities will continue cycle through just like always. There will of course be ups and downs and the coal industry is in one of those dips at the moment and this has certainly affected vacancy rates in Emerald in particular but even Gladstone is experiencing some growing pains at the moment.
Over development in these towns really have a huge impact and it takes time for vacancies to work through after a big push on development as we've experienced in Emerald and also Gladstone.
However, just like most markets there will be some great opportunities. There will be some panic selling in some cases and these opportunities are ripe for the picking if you know what you are doing and can see long term.
The coal industry attracts me because it's labour intensive and recession proof (In relation to thermal coal). People, especially in developing countries, need low cost energy.
The opening up of the Galilee Basin in particular is exciting just as is the opening up of the Surat Basin and IMHO both will do very well into the future.
Great post mate.
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This is an interesting, on Chinas coal power stations expansions :
http://www.valuewalk.com/2013/09/china-coal-power-sector-expansions/
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I don't think you will see overdevelopment in the local towns in the basin, just support industry and local economy pick up from local employment etc.
The difference with this is that it is thermal coal used mainly for power generation and the Indian company will be exporting a lot of it for their own use as I understand it. That operation alone plans to ship 30 000 000 tonnes per year.
My money is on where all lines are heading, the Bowen area. When the action dies down it will still be a very nice place to retire or live, with its established facilities and a reasonable local economy to support it. It was originally going to be the capital of Queensland when it was laid out. It has Good Beaches Good Fishing Good Farming country, Tourism and all major transport. Get out of town a bit and there are plenty of places for lifestyle or hobby farms also.
Forgot to mention, I am in the area at the moment and I am told Gina bought a local resort to develop for staff housing. Just found the article so added it this morning. She got in early as you would expect, before news pushed prices at all http://www.townsvillebulletin.com.au/article/2011/06/29/243361_business.html
Added Sat PM
Just heard that the owners of Collinsville Power Station just west of Bowen has been given approval (27/09/2013) to go Solar with 40 hectares of panels in operation 2015. 50 jobs.
So a bit more substance to support the local economy.
Adani holds the 99 year lease on the current port which it paid big dollars for.
This article give scale of revised down port development proposals http://www.sunshinecoastdaily.com.au/news/joint-venture-likely-build-one-abbot-point-termina/1824534/
Final submissions to made regarding objections to GVK Alpha Coal mine October 25 in Emerald. Water, Water, Water…I have an interest in seeing the development of the Galilee coal deposits but I personally believe the proponents should be required to build dams and pipelines. http://www.cqnews.com.au/news/objectors-to-plead-for-lifeblood/2054810/
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