Yep as I mentioned in a previous post maybe the Gold Coast will end up being a good investment again. BMA wants to fly in fly out from Gold Coast airport and the airport has secured the tiger airways terminal for FIFO flights.
http://www.goldcoast.com.au/article/2011/07/28/336331_gold-coast-business.html
shoooshoo wrote:hey guys better read below anyone investing in Moranbah/Dysart about Fly-in-Fly-out minershere is a portion of the article:
For those who own property – or are planning to – in locations where mining matters a lot I’d suggest you forget about the carbon tax rhetoric and concern yourself with other issues.
The greatest risk to the economic health of mining towns is the rising tide of fly-in fly-out workers. The more the mining company uses FIFO staff, the less likely the local town is to thrive from the presence of a resources operation.
Soon after Julia Gillard made her July 10 announcement of the details of the climate change tax policy, there was a significant news story that got lost amid all the carbon tax hysteria.
BHP Billiton – via the BHP Billiton Mitsubishi Alliance (BMA), which owns significant coalmines in central Queensland – applied to the Queensland government to allow a 100 per cent fly-in fly-out workforce at its Caval Ridge mine near Moranbah.
Under current government policies, a mining company is allowed only a proportion of its workforce as FIFO workers; 30 per cent must be local employees.
However, under BMA’s proposal, 150 workers will commute to the mine, 200km southwest of Mackay…
What are your thoughts guys?
Once again Shooshoo, I love it, I’m not even going to say that its what I’ve been saying for years (there i said it!). We need to focus on regional areas that get the fly in fly out workers living there. In towns like Macky and Emerald (sorry to come back to them) there are massive shopping centre and lifestyle developments occurring which attracts a family model to an area and can sustain it well.
Fly in and fly out is inevitable, and i personally dont think they will be allowed to do 100%, they can apply all they want but the Government doesnt have to let them.
If you look at the cost of flights in these areas, you will realise that the mines are paying big dollars to even fly them in and out. What they prefer to do is bus in and bus out, that is a lot more economical. Regions where people want to live and still work in the mines will benefit the most, that is, Emerald & Mackay and Townsville to some extent although still a bit far for bus in and bus out. In these towns the mines will subsidise a portion of rent, they wont pay thousands of dollars a week to put 4 men in a house, instead they will pay say $15,000 on top of a salary for the miner to pay their rent if they live in a local area with their family and the mine can then bus in and bus out for their shifts. or like BMA do currently, they give $60,000 towards a mortgage to every miner who buys a house in Emerald and signs a 5 year contract with them. Smart if you ask me. This all means that house prices will rise above average and so will rents, yet they will still remain affordable and relative to the area they are in.
Its the intricate details like this I believe that will make or break an investors decision in the coming years. Also we need to realise that the flow on effect of this mining boom will provide hundreds of thousands of jobs right throughout QLD, so south east will also provide security and capital gains in the coming years, just not the rents and as much capital gain i believe.
Hi all.
FIFO will only last while it’s cheaper for the mining companies than paying rents in mining towns.
FIFO may occur, and if it does then rents will fall. Then some time later, the mining companies will notice that it’s cheaper to pay for rent than flights, and they’ll stop FIFO.
If FIFO is being seriously considered, then we have an unsustainable situation with rental properties: the yields are simply above the tolerance of the market. Unsustainable situations are ….. unsustainable.
Rents go up and down in mining towns. If you believe that 14% yields will go forever you are mistaken. The market can’t afford it and will seek alternatives – even ones that seem ridiculous.
It would seem though that if rents were a little lower than they are now (but still well CF+), then FIFO would not be attractive to the mining companies. Perhaps we landlords are pushing things too hard and causing our own demise?
You can shear a sheep for life, but you can only skin it once.
Daedalus.
hi Josh,
thanks for your response, good news. What you said is good about them staying in a good size town that supports a family. You keep mentioning towns in the Galilee Basin area like Emerald, but what about in the Surat Basin itself?
Hi everyone
On the fly-in fly-out topic, it's worth noting that some unit developments currently on plan and under construction in Middlemount and Dysart apparently have mining companies competeing to lease units at rates in excess of !0% yields on long term leases. This indicates that they still anticipate long term high demand for rental properties in the region in spite of the prospect of an increase in fly-in fly-out employees.
Taking into account the limited accomadation in the region, and the projected large increase in employees required for the workforce to construct and operate the expanding mining industries, it is obviously necccessary for the mining companies to consider every available method of accomadating and transporting their workforce. My impression of the situation is that although the current extremely high yields may ease slightly, they are likely to remain at attractive levels in spite of any increase in the fly-in fly-out numbers.
A friend of my wife has told her that her husband is in Blackwater doing some contract work for a mine there. Apparently he and some co-workers have been "hot-seating" beds, as they have been unable to find accomadation for everyone. In that sort of environment, it's very difficult to imagine a decline in rental returns.Thanks for the info maxi good news for that area, do you know what is happening in the surat basin in regards to accommodation?
Sorry for late reply shoooshoo, but I see Josh gave you a comprehensive answer to your question on another thread. His advice is sound.
moxi10 wrote:Sorry for late reply shoooshoo, but I see Josh gave you a comprehensive answer to your question on another thread. His advice is sound.oki thanks moxi!
I think FIFO will be a big problem especially for places on the east coast where it is relatively easy/quick to transport people back to main hubs/capital cities, as it's what most workers will want.
There has been a couple of articles recently which have focused on how companies have been starting to offer more social benefits as a way to differentiate rather than just financial benefits (as its what's being demanded by some workers).
We have heard about a massive skills shortage in the resources industry i.e. those that are willing to live remotely pretty much already do. The only options really, to attract more people to live remotely is to pay substantially more than what is currently on offer (which has diminishing returns) or offer FIFO (lifestyle), especially back to city's such as Sydney/Melbourne (even then you will have people who still just wont do it).
As demand increases mining companies will have to offer even greater incentives to attract workers to their mines, their is no point the mining company choosing DIDO > FIFO to save themselves a buck if at the end of the day is just puts a higher cost on the worker and its not the lifestyle they want to live, they will just choose to work elsewhere and the company will have no worker.
Choosing to live/work at really remote mines barely even stacks up financially now (taking into account the higher cost of living), and then you still have to take into consideration the lifestyle hit.
Hi Guys
Just came across this article in the local Mackay Daily Mercury – Its worth a read – Not the first article I have seen where miners are protesting over FIFO or accommodation issues
http://www.cqnews.com.au/story/2011/08/10/moranbah-north-miners-have-begun-protesting-over-w/
Also the Coal conference was held on the 8th August 2011
http://www.dailymercury.com.au/story/2011/08/08/coal-conference-underway/
I have to agree with the comments by Daedalus earlier in the thread.
"FIFO will only last while it's cheaper for the mining companies than paying rents in mining towns.
FIFO may occur, and if it does then rents will fall. Then some time later, the mining companies will notice that it's cheaper to pay for rent than flights, and they'll stop FIFO.
If FIFO is being seriously considered, then we have an unsustainable situation with rental properties: the yields are simply above the tolerance of the market. Unsustainable situations are ….. unsustainable.
Rents go up and down in mining towns. If you believe that 14% yields will go forever you are mistaken. The market can't afford it and will seek alternatives – even ones that seem ridiculous.
It would seem though that if rents were a little lower than they are now (but still well CF+), then FIFO would not be attractive to the mining companies. Perhaps we landlords are pushing things too hard and causing our own demise?
You can shear a sheep for life, but you can only skin it once.
Daedalus."
Cheers
Daedalus wrote:Nebo is a funny one. There are a few mines nearby, but it doesn't have a boom feel to it. It is predominantly a cattle town.At the moment there are a number of vacant and unsold houses. Some of these are actually leased though to one of the energy companies.
There is talk of Nebo being set up as an 'inland port'. I understand this to mean that they will set up heavy manufacturing and servicing here e.g. they will build and service rail rolling stock for use within the basin. The advantage this would have is that Nebo is already up on the tableland where the basin is. It's another hour or two down to Mackay, and so Nebo would save a lot of hauling up and down the hill. If this comes off, Nebo would change appreciably.
Nebo is close enough to the coast that workers in the local mines often just live in Mackay and drive or bus to work. Some work 5 days/5 days off, and this lets their families enjoy a coastal lifestyle. This would seem to be infinitely more interesting than living in Nebo, unless of course you were born and bred there maybe.
Really nice pub in Nebo though
Daedalus.
Hi there
I am currently looking at NEBO which I think has been overlooked and has some potential – there is still some cheap land available its 100 km from Mackay and 100 km to Moranbah and on the Junction to Dysart and Middlemount. AND there is a new railway maintenance depot about to be built at NEBO and its one big shed which will be able to house a full length coal train under one roof – that's about 2 kms in length.
See attached links http://www.dailymercury.com.au/story/2011/06/01/coal-rail-project-delivers-jobs/
http://www.abc.net.au/news/stories/2011/06/01/3232793.htm?site=capricornia
http://www.ndy.com/projects/nebo-rail-maintenance-facility
What are your thoughts on the place 31/2 yrs down the track??
Hi guys,
I just saw this trailer for this documentary called “gasland” you can see a trailer of it on youtube:
http://www.youtube.com/watch?v=dZe1AeH0Qz8
It looks at the harmful effects of gas drilling through the process called “fracturing” a hydraulic drilling process also called fracking. In the Documentary it uncovers that what comes out of the ground with the gas is harmful as it effects the water polluting it because of the fracturing process. The filmmaker travels across 32 states in the US to meet rural residents on the front lines of fracking. He discovers toxic streams, ruined aquifers, dying livestock, brutal illnesses, and kitchen sinks that burst into flame
Just curious is this happening in central queensland in the surat and bowen basin as well?
Regards
sherifit should be noted that the documentary is under scrutiny, some say its true , some say not.
Hi ShooooShooo
I can only think of one thing to say at this time and that is you can find a million reasons not to invest in an area or you can look for the one reason to invest in an area – Its really up to you
cheers
KeyStrategies wrote:Hi ShooooShoooI can only think of one thing to say at this time and that is you can find a million reasons not to invest in an area or you can look for the one reason to invest in an area – Its really up to you
cheers
far enough!
yeah but that is still concerning:
http://www.couriermail.com.au/ipad/gas-plans-could-lift-meat-costs/story-fn6ck45n-1226096935838
shoooshoo wrote:yeah but that is still concerning:http://www.couriermail.com.au/ipad/gas-plans-could-lift-meat-costs/story-fn6ck45n-1226096935838
Shooshoo,
I agree with KeyStrategies.
You need to understand how investment works. Successful investors do their research, work out what they want to invest in and why. Then they just do it.
People who ‘invest’ when all the media is saying how great things are, are not investors. They are the suckers who buy at the top of the boom. True investors ignore the media hype, and as a result almost always buy when the media is printing bad news (or printing nothing at all). The media know nothing about investment, they only know how to sell advertising.
Note: I’m not saying you should invest *because* there’s negative press.
You need to do your homework and then do what your brain says. Ignore media hype, it is not really that useful for serious investors.
Daedalus.
Thanks Daedalus,
I’m a babe investor
with my previous investments, i have not done much research, this time i committed to do a good amount of research. thanks for your comments.shoooshoo wrote:I'm a babe investor with my previous investments, i have not done much research, this time i committed to do a good amount of research. thanks for your comments.Hi again Shoooshoo – good to see you are doing your research upfront that is a wise decision – you said in another post you wanted to find the next Dysart or Moranbah well here is a tip – what were they like 6, 12 or 18 mths ago – would you have invested in the towns back then? You need to have some foresight and be prepared to back your judgement – there is also the case of going overboard and suffering from analysis paralysis
cheers
KeyStrategies wrote:shoooshoo wrote:I'm a babe investor with my previous investments, i have not done much research, this time i committed to do a good amount of research. thanks for your comments.Hi again Shoooshoo – good to see you are doing your research upfront that is a wise decision – you said in another post you wanted to find the next Dysart or Moranbah well here is a tip – what were they like 6, 12 or 18 mths ago – would you have invested in the towns back then? You need to have some foresight and be prepared to back your judgement – there is also the case of going overboard and suffering from analysis paralysis
cheers
hahaha Analysis Paralysis…yeah you are not the first person to say that to me!
THis is exactly what i’m trying to do , see them 6-12months ago before they boomed, find out the causes and trends of what took it in that direction, and i have read every single post on this forum topic over a couple of weeks, and some trends that i have picked up, is towns where rents are increasing, which in effect create capital growth. these have been mining towns, moronbah, number one, then dysart, 2, middlemount, and blackwater, are more minor from my understanding. looking at the map that coalstar has linked:
http://mines.industry.qld.gov.au/assets/mines-pdf/cq_bowen_basin_mines_and_staff_a3_may2011.pdf
you can see why Moronbah and dysart are doing well.
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