QLD mining towns

Hi all,

well after reading your posts I started doing a truckload of research on both Wandoan and Moura. Last week I took the plunge thanks to cheap fares on QF ($146 one way to Rocky) and drove out to Moura and Wandaon. [ note for those of you thinking of doing this you cant get accommodation in either town, they are booked solid 12 months out……so I stayed in Rocky]

well worth it let me tell you. at the moment Moura is in a hiatus (please forgive spelling if incorrect) but it was confirmed after not only talking with the agent but with some locals that work for Anglo, that they are indeed bringing on 50 contractors but more are to come. There are a lot properties out there but it would appear not a lot of action at the moment, no doubt some investors are having trouble getting finance I would think.

Wandoan, well there is only 2 agents in town and the guy I spoke to only had a few properties available. The rents are all over the place but some Xstrata execs are due in town around March with some major announcement due from them about April/May.

This place is simmering and will go off once the rail line is officially announced as a go ahead. Was due before Xmas but still waiting. The rail line is a joint venture between Xstrata and a number of other firms who are paying for it to be built. Once it starts the other stuff can start as well. As usual nothing is guaranteed, but the rents at the moment are being driven by the gas drilling companies and the mine construction has not even been started yet, when that starts rents will ramp up considerably.

In both towns the houses do vary greatly with most being on stumps, of a timber outside and masonite walls on the inside.

Dont expect luxury in these older places, remember its a mining town, not a resort. I can tell you the agents do get their cut with commissions though.

a guy from cockatoo constructions in moura tried to sell me building a house with them, and the cost to build a house was around $280,000 which really seems like a rip off to me, even out there where they are only 2 hrs from Rocky, its robbery. I am checking with some rocky builders to see what they might do, because if they can come in at around $220K (total turnkey)max plus $90K for the land then there could be around $100K at the back end when you sell. A corporate rental there would take a rental on a new property like that for around $450 – $500 per week minimum at this time, which would be enough for an investor to take on without any probs.

Well thats it from me

cheers
HP

I live in Moranbah and work in a mine here in mgmt and can say that things are on the move again. We have tried to buy a few properties, only to lose out to multiple offers or the house selling on the spot to someone on the agent’s buyer’s list- All well priced houses don’t make it to the internet, they all sell within the first few days. Rents are still down on what they were during the boom but still returning 7-8%, once contractors come back into town rents will tighten again. With construction of 2 new mines next year things are expected to take off again, which is why investors are snapping up houses now, before prices go silly again. From a macro perspective, coal demand and export pricing is picking up again which is good news for the industry.

Here is an article out of today's Australia.

01/02/10 Xstrata in $15bn Queensland coalmine bonanza  

ANGLO-SWISS miner Xstrata is hatching plans to build a huge 100-million-tonnes-a-year thermal coal operation in Queensland that could cost $15 billion and rival the Hunter Valley as the nation's biggest coal-producing region.

Xstrata, the world's biggest thermal coal exporter, and its Japanese joint venture partners intend to expand almost fivefold the current planned output of 22 million tonnes a year near the small town of Wandoan, 400km northwest of Brisbane, in the next 10 to 20 years.

The plans come as Xstrata chief executive Mick Davis calls an end to nearly a decade of aggressive growth by acquisition, saying his company will now focus on organic growth.

Xstrata's plans are ambitious. By comparison, Newcastle, the world's biggest coal port, ships about 90 million tonnes of coal a year, while Queensland currently produces less than 45 million tonnes a year of thermal coal.

Thermal coal is used in power stations.

Coking coal, which is higher quality, is used to make steel. It is mostly exported from Queensland.

According to the Paris-based International Energy Agency, global coal consumption is forecast to grow almost 40 per cent in the next 20 years as electricity demand increases.

Xstrata Coal's chief development officer, Jeff Gerard, told The Australian that Wandoan was expected to expand in four stages and could be producing 100 million tonnes a year sometime in the 2020s.

"Xstrata Coal is developing all of this based on a strong view of demand," Mr Gerard said yesterday. "We will be maintaining our lead position as a thermal coal exporter.

"Growing demand globally means there are a number of basins that will need to open up around the world, and Wandoan is ranked highly against all others in terms of quality, cost and proximity to port."

Last year, Xstrata tried unsuccessfully to merge with AngloAmerican in a deal that would have created Australia's biggest coal producer, among other achievements.

In a presentation at the end of last year, Mr Davis told investors not to hold their breath for another company-transforming acquisition.

While it may make bolt-on acquisitions, Xstrata was focusing on making existing assets perform and developing new ones, he said.

All coal from the first Wandoan mine, which will be one of Australia's biggest, could be exported through Gladstone's planned Wiggins Island terminal.

If Wandoan is expanded, under Xstrata's plan to have four mines each producing 25 million tonnes a year there, coal would probably be shipped through Xstrata's planned Port Alma terminal to the north of Gladstone.

Port Alma is being designed to handle 35 million tonnes a year, but could be expanded.

Xstrata owns 75 per cent of the Wandoan leases, with Itochu and Sumitomo owning 12.5 per cent each.

Xstrata says the area could contain between four and 7.7 billion tonnes of coal. About $3bn will be spent building the first mine at Wandoan, which is currently going through the approvals process, and about the same again for infrastructure. Construction is to start next year, with first coal exports in 2014. The three other mines are expected to cost $2bn-$3bn each, with lower infrastructure costs.

The ETS and any resource rent tax could affect the development, Xstrata said.

What now in Wandoan? After the article from the Australian of 1/2/10 (see scedd's post above) Ray Mortimer is being run off his feet. Investors want anything he has got, both houses and vacant land. Refer back to scedd's post of 17 December, he provides a word picture of Wandoan i.e. there is only limited land in the area due to swampy land  on one side, native title on the other and mining leases on the others.

The hotels, motels  and caravan parks are charging $130 plus per night for accomodation and these are booked out many months ahead by gas, coal and infrasrtucture companies. I can see rents reaching the dizzy heights of Moranbah and  Dysart. $1000 plus a week. Harry Potter in his post above seems to agree with this. And this is only the beginning!!!!

I suggest people to get into the area while you can. Get in touch with Ray Mortimer at Wandoan Realty. But do it quick as he is running out of property. He tells me that people are after any homes as they will knock them down and rebuild!!!!! 

Dodger

Hi Scedd,

I sent you a PM.
Would like to know more about your unit develop in Wandoan that you previously mentioned.

Heard that Wandoan  has gone crazy.   Since the  announcement last week about the  BG's $60 billion gas development, investors have desceended on Wandoan and bought most of the existing houses that are for sale and any spare land for future building.  4 bedroom houses are being rented for $600 plus a week. This is only the beginning. Xstrata are believed to be making an announcement soon, and the there are also the final approvals for the railway and the gas pipelines.
 

Ray Mortimer of Wandoan Reality is doing a very brisk business.

Dodger

Ben,
have a deeper look and you will see an anomally in there. A true sale just not a residential house. Dont panis, the boom did not come and go!!!!

I note that Belvedere has announced that it is finished its prefeasibility study and is moving forward to the next stage. Over $700million for surface infrastructure works (site buildings, coal loaders, roads etc) so that the mine can commence rapidly thereafter. That will bring in an influx of workers!! Coal expected to start 2014 with a 20-30 year life span and now talk of a profit driven (rather than capital cost driven) coal gas enterprise on the side. 

All our rentals are now tenanted and we have approvals for building units. Early discussions with corporates look good for these to be taken before they are built, as the big homes arent suitable for the workers, more mine boss style. May have to see if other projects allow the financing of this one otherwise……to market to market it will go. I think I would prefer to avoid the local REAs there at this stage, any suggestions on where I could list the DA approved project? I prefer my rentals so even if finance works this one may go.

Mick