Hi All,
I would like everyone's opinion on which town would they invest in if they had to choose between Port Hedland WA, or Moranbah QLD.
And why would they choose one from the other.Thanks,
Sean.
Hi Sean,
Vested interests apply here.
I am more familiar with Port Hedland area than Morandah so I'll restrict my comments to Hedland.
Terry Ryder's recent Hedland Hotspotting Report ($33) is available here http://www.hotspotting.com.au/report/108-port-hedland I am sure he has a similar report for the basin in which Morandah is located.
The report outlines significant capital investment planned for Hedland by BHP, Consolidated Minerals, Atlas, FMG, Hancock et al which includes stated intention of increasing Port capacity significantly.
Houses are expensive and rents enormous. Difference in prices between Port Hedland and South Hedland on a like for like basis is significant.
HI Sean,
Coincidentally this just arrived in my inbox from Terry Ryder.
"What's a "boom town"? Here are four definitions…
- A town of 1,100 where $3 billion will be spent Hedland – check
- A town of 11,000 where $9 billion will be spent on its port Hedland – check
- A regional centre with a key mining province on one side and a port undergoing a $10 Billion expansion on the other Hedland – check
- A regional city where the port, the airport, the train service and the road system are all undergoing major expansion
These are the towns and regional cities where the real action in the Australian economy is happening."
MY INSERTIONS IN RED
Neither, Wandoan QLD
3,000 people moving in for a new $6 Bill open cut coal mine, biggest in QLD, one of the biggest in the world
Close to Chinchilla, Miles and Dalby
Mine has already purchased over 40,000 Hectares of land and ready to go.
500 people currently live there so there will be a massive reason for property to be constructed to house all the other people moving in.
$1 Bill Rail Line approved, just waiting on the mine approval which will come any day nowMoranbah vs Port Hedland?
Some things to consider:
– Outlook for iron ore vs Premium Coking Coal
– China’s peak in it’s steel making intensity vs. India rapidly emerging
– FIFO practices emerging in Moranbah, Camp approvals
– Approvals for new projects in surrounding regionIt seems the commodities analysts & major mining companies are generally much more bullish on a sustained shortfall of premium hard coking coal (as opposed to iron ore). One important trend to understand is that as China/India strive for efficiencies in steelmaking, they are building larger, modern integrated steel mills, and these require higher grades of coking coal. The exact same coal that surrounds the towns of Moranbah & Dysart. If you look at the coking coal projects either under consideration or in progress, you will see that geographically they are centered on Moranbah/Dyasrt, and this is why the medium term prospects are very good. Threats are Mozambique & Mongolia, but both suffer infrastructure deficiencies, and will take time.
Iron ore on the other is a relatively common mineral, with many deposits. There is a supply shortage generally, but analysts expect this to ease in the coming years, potentially cooling the Pilbara property market (??)
Another consideration – Port Hedland rental yield ~10%, Moranbah ~15%. This means greater potential for future capital gain in Moranbah.
Wondoan – Pure speculation. Yes there is a deposit, and Xstrata have been promising to develop for years. Now they have sold off a stake, and there is some analyst speculation of further delays.
Yep. I read an interesting article in the AFR this week about Xstrata being held up yet again in Wandoan.
Agree with primoHCC on this one. Those underlying fundamentals in relation to hard coking coal in the Bowen Basin are solid.
With the industrialisation of China and India, the development of a more capitalist society and a rapid shift away from socialism not to mention a growing middle class demanding ‘stuff’ I think the demand for not only hard coking coal but thermal coal looks strong into the future.
Looking further west, India’s Aldani has already moved to secure the thermal coal in the Galilee Basin and port on the coast, and now trying to get the rail access to the port. Their even suggesting FIFO semi skilled foreign workers on 747s!
JT7 wrote:With the industrialisation of China and India, the development of a more capitalist society and a rapid shift away from socialism not to mention a growing middle class demanding 'stuff'Hi JT,
I recall an article about 10 months ago discussing the impact of urbanisation on Australia's mining industry. The article (memory cannot provide which paper) spoke about the ongoing urbanisation of China and India but also predicted the next biggies would be places like Indonesia, Vietnam, Thailand and a host of South African countries who are also on the cusp of urbanisation.
Many people seem to overlook the next tier of countries who will progress and therefore be buyers of resourcs materials.
Derek wrote:JT7 wrote:With the industrialisation of China and India, the development of a more capitalist society and a rapid shift away from socialism not to mention a growing middle class demanding 'stuff'Hi JT,
I recall an article about 10 months ago discussing the impact of urbanisation on Australia's mining industry. The article (memory cannot provide which paper) spoke about the ongoing urbanisation of China and India but also predicted the next biggies would be places like Indonesia, Vietnam, Thailand and a host of South African countries who are also on the cusp of urbanisation.
Many people seem to overlook the next tier of countries who will progress and therefore be buyers of resourcs materials.
Totally agree Derek.
I’ve read a couple of articles within the last 3 months in the Australian Financial Review which have examined this shift.
Even the RBA appears very confident about the long term future of this shift.
Again in today’s AFR, an interesting article on page 25 by Darrie Dunstan discussing the long term prosperity of the Australian economy off the back of a burgeoning resources sector despite the bumbling approach by our politicians.
In relation to the huge investment and development of the resources industry in this country, and these fundamental shifts were are witnessing in these developing countries, I’ve heard it many times referred to as not a ‘once in a life time event’ but a ‘once ever event.’
Jack
Hi Jack,
Racing off to buy today's AFR.
As an aside, and for the benefit of other readers of this thread, there is an online article released today which specifically talks about Moranbah. Click here to read
Enjoy.
Derek wrote:HI Sean,Coincidentally this just arrived in my inbox from Terry Ryder.
"What's a "boom town"? Here are four definitions…
- A town of 1,100 where $3 billion will be spent Hedland – check
- A town of 11,000 where $9 billion will be spent on its port Hedland – check
- A regional centre with a key mining province on one side and a port undergoing a $10 Billion expansion on the other Hedland – check
- A regional city where the port, the airport, the train service and the road system are all undergoing major expansion
These are the towns and regional cities where the real action in the Australian economy is happening."
MY INSERTIONS IN RED
Hi Derek , Sean and everyone – I am joining this conversation a bit late but have just been working thru Terry's 4 Boom Towns
Initially I thought as follows
1) Roxby Downs due to Olympic Dam mine expansion but that's only $1.2 Billion initially which increases to over $8 Billion
2) Is Bowen due to the Abbot Point Port expansion http://http://www.dailymercury.com.au/story/2011/12/01/demand-drives-9b-expansion-of-abbot-point/ and it was just announced that this decision has been delayed from 30 March to December 2012.
3) Thinking Mackay or Emerald but will research Port Hedland
4) Has to be Newcastle as it ticks all the boxesOne way to end the speculation is to buy Terry's report I guess
As for Moranbah vs Hedland – I can't say anything about Hedland as I haven't researched it but I have invested in Moranbah – great spot but as Terry Ryder points out the best time to buy was 18 months ago. Currently too hot a market for me prices have jumped substantially over the past 6-9 months from $400k to $750K for an old house and close to the $1 mill mark for new homes plus supply is an issue with lots of new stock coming onto the market – I am aware of 4 projects that will provide around 400 units, plus there are aroud 200 to 300 new dwellings either being built or to be built and another 300 plus lot subdivison that will provide around 400 dwellings in the pipeline – Increased supply will impact the current high rents that skyrocketed due to demand. So either way do your homework mining towns are volatile.
I can only talk about WA and I think Karratha is a lot better than Port Hedland to invest as it has all the government agencies and the hospital. I lived in both cities and Karratha is a mining town with families and it’s a nice place to be, Port Hedland is not. Karratha has Woodside, Rio, BHP, Burrp Fertilesers, Dampier Salt and the port of Dampier feeds all the oil rigs in the area. A lot of big industries, a new town development coming up and a big future.
I done some research about Morambah and looks interesting too, but I would like to go for a drive one day. Dysart was in my list too.
Just my two cents
Mosqui
Port Hedland is much safer bet than Moranba,
It's because of the isolation make the town/area looks like monoploy, it forces all the miners or mining related people live there.
However, for the Moranba, the miner or mining related people can live in nearby town couple of hours away.
Hence, personally I would think Port Hedland is much safer bet than Moranba.
- A town of 1,100 where $3 billion will be spent Hedland – check
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