Archive for December, 2011


Thursday, December 22nd, 2011


The company driving a proposed coal mine in West Australia’s internationally-renowned wine region is looking into its options after the bid was rejected by the WA environment minister.

Environment Minister Bill Marmion on Wednesday rejected Vasse Coal Management’s proposal to develop a coal mine north-east of Margaret River due to environmental risk concerns.

The Minister backed Environmental Protection Authority recommendations made earlier in the year, which warned there would be significant impacts or risks from the proposed mine in Margaret River on the Leederville and Sue aquifers.

Five appeals to the EPA recommendations were made, which Mr Marmion will now have to take to the WA planning minister before the rejection can be finalised.

”Margaret River is a unique region with important environmental values which should be protected. From an environmental perspective, this project is too risky,” Mr Marmion said in a statement.

It was the second time Mr Marmion had knocked back appeals against the EPA recommendations to halt coal mining in as many days and meant there would be no new coal mining approvals in WA for the year.

Vasse Coal Project joint venture partners Vasse Coal and South West Coal engaged LD Operations to manage the approvals process.

LDO managing director Peter Ross said Mr Marmion’s decision went against the advice of government agencies and independent experts that further information was needed before the proposal’s environmental acceptability could be determined.

“LDO will now consider its rights with regards to the Minister’s decision,” he said in a statement.

The WA Chamber of Minerals and Energy has warned against a blanket ban on mining in Margaret River.

CME director Nicole Roocke said the Chamber was responsible for the one of the EPA appeals because it did not believe the decision against Vasse Coal had been based on proper research.

“CME appealed on the grounds the report lacked process and procedural fairness and departed from the Administrative Procedures used in the assessment process, which were established to provide certainty to industry, government and the public,” Ms Roocke said in a statement.

“It is important for all proponents and parties that such processes are consistent and transparent, and that the EPA establishes an evidence base to support decisions impacting the commercial position of resource companies.”

Sourced & published by Henry Sapiecha


Tuesday, December 13th, 2011


Saudi Arabia is by far the world’s largest oil exporter. Thus, when it raises its production, oil prices usually fall. Yet, when Ali Naimi, Saudi oil minister, said last week Riyadh was pumping more than 10m barrels a day, prices barely moved a few cents.

Oil traders were in disbelief at the number. The International Energy Agency estimated that in October the kingdom pumped 9.45m barrels a day and Opec itself put Saudi production at 9.47 b/d in the same month. The level of production that Mr Naimi stated suggested a huge increase, in only a few weeks. Moreover, the 10m b/d is a psychological barrier – a level the kingdom has not reached since the aftermath of the second oil crisis in 1979.

The level of Saudi oil production has triggered a heated debate among oil traders, analysts and government officials.

The discussion is twofold: on the one hand, about the level itself; on the other, about why it has boosted its output at a time when many are betting that oil demand growth is slowing down, not accelerating.

The discussion is critical to understand the direction of oil prices in 2012.

The 10m b/d figure is controversial in the market.

Some oil traders do not believe the number at all. Two of the largest top-five independent oil trading houses have told me that their own numbers suggest a much lower production level. The traders largely dismiss the 10m b/d figure as a bargaining tactic ahead of the Opec meeting on Wednesday.

Yet, other sources suggest that Saudi Arabia has indeed boosted production sharply over the past few weeks, potentially towards the 10m b/d mark.

The Lloyd’s List Intelligence Apex database, which tracks tankers around the world, puts Saudi Arabia’s oil exports at nearly 7.4m b/d. Add local demand of about 2.7m b/d and you get to the 10m b/d. In addition, Lloyd’s List Intelligence estimates suggest that Riyadh boosted month-on-month exports sharply, from 6.7m b/d in October to 7.4m b/d in November. Other tanker trackers have yet to publish their numbers, but the talk in the market is that they also have witnessed a big increase in tankers sailing from Saudi oil export terminals.

So if the numbers are right – a big if for many traders – what do they say about the health of the global oil market?

The International Energy Agency puts global oil demand this quarter at 91.4m b/d, up from 90.9m b/d from the previous quarter due to the onset of the Northern hemisphere winter and the surge in heating demand. The seasonal increase in demand could well explain an output hike.

But I think there is more. China’s oil demand, which only a month ago appeared to be slowing down to a halt, could be accelerating in reality. Chinese refiners processed a record amount of crude oil in November to offset diesel shortages and oil imports surged last month to the second-highest monthly volume on record, hitting 5.52m b/d, just short of an all-time high of 5.67m b/d in September 2010, according to estimates by Thomson Reuters based on official Chinese data.

The bottom line is that Saudi Arabia could very well be telling a lot of naysayers and sceptics in the market that global crude oil demand is a lot healthier than many assume.

Sourced & published by Henry Sapiecha


Thursday, December 8th, 2011

Diamcor Expands its Drilling Programme and Amoves ahead with

Preparations for Bulk Sampling at Krone-Endora at Venetia

KELOWNA, August 17, 2011 – Diamcor Mining Inc. (TSX-V.DMI / OTCQX-DMIFF) (the “Company”), is pleased to announce that it continues to make excellent progress on the completion of the recommended drilling programme and site preparations for the Company’s planned transition to recommended bulk sampling at its Krone-Endora at Venetia project (the “Project”).  In addition to the drilling efforts, which are now in their final stages, approximately +/- 20 employees, consultants and contractors, including heavy equipment, are preparing for the Company’s commencement of the recommended bulk sampling program.  Preparations include the establishment and upgrade of access roads throughout the Project, preparations for the installation of an initial water pipeline, preparation of the area selected for the anticipated delivery of the bulk sampling plant, preparation of areas which have been selected for bulk sampling, establishment of operational offices and infrastructure on-site, procurement of equipment necessary for bulk sampling, and the procurement of the bulk sampling plant for delivery to the Project.  Further details regarding Company efforts to support the transition to bulk sampling will be released by the Company in the coming weeks.

Drilling Programme Expanded:

The Company initially planned to drill approximately 390 targets on the K1, K3, Confluence, and areas of interest immediately adjacent to these areas of the Project as part of the recommended drilling programme.  Due to the encouraging results of the ongoing drilling efforts in identifying additional gravel bearing areas, and the desire to further extend drilling into new areas, the Company expanded the total number of drilling targets and has now successfully completed the drilling of 469 targets.  In addition to the drilling completed to date, the Company plans to further extend drilling to include an additional +/- 50 targets in new areas to the north east of the K3 and Confluence areas.  All targets drilled to date have been in areas outside of the current fence-line of Venetia.  In conjunction with the drilling of these extended targets outside the current fence line of Venetia, the Company also plans to complete the drilling of various targets inside the fence-line of Venetia in the coming weeks.  The drilling of targets inside the fence-line of Venetia is aimed at aiding in the identification of potential extensions of the known deposits from the K1 area through the areas to the East of K1 where drilling has now been completed up to the Venetia fence-line.  The Company is targeting the completion for all remaining drilling prior to the end of the third calendar quarter.

Data gained from the combined drilling efforts is designed to aid the Company, and independent geologists, in determining the depths of the underlying bedrock throughout the various initial areas of the Project being drilled, to provide additional information on both the known lower-grade upper gravels and higher-grade basal deposits in the areas of the Project which were previously identified by De Beers, and to identify potential extensions and the directions of any additional deposits into new areas from the proposed source of the deposits, the adjacent Venetia kimberlites.  Data is also being used to identify the target areas for the Company’s recommended bulk sampling programme.

The combined results of the recommended drilling and bulk sampling programmes are designed to support the filing of a new updated NI 43-101 Technical Report (the “NI 43-101 Report”) for the Project in the coming months.  These programmes will also be used to aid in the recommended advancement of the Project to trial mining exercises in the near-term, and to assist the Company in assessing a production strategy for the Project over the long-term.  The current NI 43-101 Technical Report as filed by the Company on July 30, 2009 was based solely on the areas of the Project on which De Beers previously performed initial work, with the average diamond dollar per carat price estimate in that report dating from 2005.  In addition to further establishing grades and other relevant information in areas being targeted for bulk sampling, the Company anticipates that the rough diamonds recovered during bulk sampling will allow the Company and independent geologists to establish the current rough diamond dollar per carat average for the Project.

About Krone-Endora at Venetia:

On February 28, 2011, Diamcor successfully completed the acquisition of the Krone-Endora at Venetia Project from De Beers. The Project consists of the prospecting rights over the farms Krone 104 and Endora 66, which represent a combined surface area of approximately 5,888 hectares directly adjacent to De Beers’ flagship Venetia Diamond Mine in South Africa.  De Beers previously completed various exploration efforts on initial areas of interest comprised of approximately 310 hectares, a summary of which has been reported in an initial Independent NI 43-101 Technical Report filed by the Company on July 30, 2009.  The deposits which occur on the properties of Krone and Endora have been identified as a rare, higher-grade lower “Eluvial” basal deposit which is covered by a lower-grade upper “Alluvial” deposit.  The deposits are proposed to be the result of the direct-shift (in respect of the “Eluvial” deposit) and erosion (in respect of the “Alluvial” deposit) of an estimated combined 1,000m (1 km) of material from the higher grounds of the adjacent Venetia kimberlite areas.  Based solely on the work completed to date, the current NI 43-101 Technical Report filed provided an inferred resource estimate of 54,258,600 tonnes of diamond-bearing gravels and 1.3 million carats of diamonds for the initial areas of interest alone.  The deposits on Krone-Endora occur in two layers with an average total depth of only 15.0 metres from surface to bedrock, allowing for a very low-cost mining operation to be employed, and the potential for near-term diamond production from a known high-quality source.  Krone-Endora also benefits from the significant development of infrastructure and services already in place due to its location directly adjacent to the Venetia Mine.

About Diamcor Mining Inc:

Diamcor Mining Inc. is a fully reporting publically traded junior diamond mining company which is listed on the TSX Venture Exchange under the symbol V.DMI, and on the OTC QX International under the symbol DMIFF.  The Company has a well-established operational and production history in South Africa, and extensive experience supplying rough diamonds to the world market.  Rather than exposing itself to the high risks and costs associated with exploration, the Company’s focus is on the identification, acquisition, and operation of quality near-term production based diamond projects such as the Krone-Endora at Venetia Project.  For additional information on Diamcor, please visit our website at

Strategic Tiffany & Co. Alliance:

As announced on March 29, 2011, the Company has established a long-term strategic alliance and first right of refusal with world famous New York based Tiffany & Co. to purchase up to 100% of the future production of rough diamonds from the Krone-Endora at Venetia Project.  To expedite the production and supply of rough diamonds from Krone-Endora at Venetia, Tiffany & Co. has also provided the Company with additional financing for the Project.  Tiffany & Co. is a publically traded company which is listed on the New York Stock Exchange under the symbol TIF.  Originally founded in 1837, the Tiffany’s name is now globally recognised as one of the premier luxury jewellery and specialty retailers in the world.  Through Tiffany & Co. and various other subsidiaries, the company is engaged in product design, manufacturing, and retailing activities on a global basis.  As of October 31, 2010 Tiffany & Co. operates 225 retail stores and boutiques in the Americas, Japan, Asia-Pacific, and Europe and engages in direct selling through internet, catalog and business gift operations.  For additional information on Tiffany & Co., please visit their website at

Sourced & published by Henry Sapiecha


Saturday, December 3rd, 2011


GRAHAM Evans has lived in Dampier, on the Pilbara coast, for 43 of his 50 years. As a boy, he rode the school bus with the famous Red Dog, and swam off the beach in a now-vanished children’s enclosure, near where a busy hub for commercial seacraft now sits.

Evans’ livelihood is linked to the resources sector that dominates Dampier and nearby Karratha; his business, Australian Marine Services, runs a fleet of vessels that services the enormous and bustling Port of Dampier, from where 140 million tonnes of iron ore are shipped each year.

Yet Evans is ambivalent about the changes that have followed the boom. Karratha, the dusty town earmarked by the state government to become a 50,000-strong ”City of the North”, is bursting at the seams with its population of 14,000, and a fly-in-fly-out workforce that – at any given time – swells the shire’s population by thousands.

PICTURES MALCOLM HEBERLE 2/12/2011 AGE BUSINESS   Story Ruth Williams.Dennis Wellington, Mayor and retailer, owns a store called Leading Edge Hi Fi, Albany.
Mayor and retailer Dennis Wellington. Photo: Malcolm Heberle

It has meant that, after 23 years in business, Evans has never struggled so hard to find, keep and house workers. In a town where workers are paid as much as $200,000 on a mine or construction site, Evans finds it hard to match the wages and conditions on offer. He has had to buy two extra homes just to accommodate his workers, who would struggle to afford local rents that average about $1500 a week.

They are just some of what he calls the ”little frustrations” that come with living in the midst of a mining boom – at the very top gear of the multi-speed economy.

Meanwhile, almost 2000 kilometres to the south, in the WA coastal town of Albany, Elton Woodhams, 35, is contemplating joining the exodus to the north. Woodhams owns a bobcat business and has just finished building his dream home with wife Katie. But in six years running his own business, he has never experienced a time so quiet. This time last year, he was working flat out, five or six days a week. ”It was busy from day one,” he says. Now, he’s lucky to work one day a week.

PICTURES MALCOLM HEBERLE 2/12/2011 AGE BUSINESS   Story Ruth Williams.Elton Woodham, owner, One Tonne Bobcat. ALBANY W.A.
Albany bobcat business owner Elton Woodham. Photo: Malcolm Heberle

With the Aussie dollar soaring, Albany’s crucial tourism industry is facing greater competition from the cheap lures of Bali, and its farming sector was hit by drought last year. But Albany is also suffering the same malaise as any region not linked to the mining boom. It is firmly stuck in second gear.

When those on the east coast picture the two-speed economy in their minds, they see a nation divided between the mining states and the rest. They see WA and Queensland running at full speed, their residents raking in boom-time wages and their state governments battling to spend an endless stream of mining royalties, as the rest of Australia grapples with the consequences.

But the truth is that the so-called patchwork economy is not neatly divided along state borders. It is a region-by-region, suburb-by-suburb, street-by-street proposition that is having an impact on WA just as dramatically as on the non-mining states.

WA, however, must deal with the extremes of the patchwork economy in a state almost as big as NSW, Queensland and Tasmania combined; that has a voracious need for people and infrastructure up north; a capital city, Perth, that is staggering under the weight of a population influx; and large areas in the south that are falling behind.

Nationally, the two-speed economy shows no sign of dissipating. Growing fears on how the financial tumult in Europe will play out continue to weigh on the minds of Australian consumers and investors; unemployment is ticking up and the high Aussie dollar is taking its toll on local manufacturers. This week, the chief executives of both BHP Billiton and Rio Tinto warned of a gloomy outlook for the world economy due to the ructions in Europe.

In WA, retail sales are stronger, wages are higher and unemployment is lower. Despite their caution, both mining bosses reiterated their faith in the continued growth of the all-important Chinese economy, to which WA’s economic wagon is well and truly hitched. Business investment data out this week showed the continued strength of the boom – mining investment surged 22 per cent over the three months to September 30, and 60 per cent over the year, helping boost wider business investment to its fastest rate on record.

It all looks economically rosy in WA. But there is another story below the surface.

”There’s a resources boom, but there are also sections of the economy that are travelling very slowly,” says Eric Ripper, Leader of the Opposition in WA and a former state treasurer. ”The property market is flat. Every retailer will tell you business is very slow, the tourism industry is struggling, education exports are challenged.

”So the two-speed economy, the multi-speed economy, the patchwork economy is a feature of WA, just as it is a feature of the national economy.”

THE ghost town of Cossack sits on the coast north of Karratha. Once a bustling port and centre of the north-west pearling industry, it was at its peak during the 1880s, when thousands of prospectors shuffled through the port on their way to the newly discovered Pilbara goldfields.

Cyclones, competition from other ports and the end of the gold rush led to Cossack’s decline, and it was abandoned after World War II.

But, from a lookout near the town, one can see the latest mining boom in full swing.

On the horizon, the ore ships – seven or eight or nine at a time – await their turn to dock and take their load from the giant stockpile at Cape Lambert port, owned and operated by Rio Tinto.

Cape Lambert’s 80 million tonne capacity will be more than doubled by 2016, at which point it will overtake nearby Dampier Port. Throw in the area’s other big resource projects in place or coming soon – Woodside’s North West Shelf LNG operation, its forthcoming Pluto project, Chevron’s Wheatstone LNG project in Onslow, and the tens of billions of dollars of others being planned, built or considered – and it becomes clear where the hunger for workers and money is coming from.

For some, this hunger has resulted in big salaries and big living – a once-in-a-lifetime opportunity to work hard and earn sums of money once unattainable. But this hunger is so strong it has also severely warped the local economy.

In Karratha, a housing shortage has pushed up rents on standard four-by-twos to $1800 to $2000 a week. Few can afford to rent in Karratha unless they are housed by their company, or their rent is subsidised. A hotel room costs between $350 and $450 a night, and can be a rare commodity. A toasted cheese sandwich costs $12, petrol is $1.60 a litre.

The new buzzword in Karratha is ”normalisation” – the process by which this dusty boomtown, with its sky-high rents, FIFO (fly-in, fly-out) swagger and lack of amenity, will again be the sort of place where a family can afford to live in a decent house, whether they work in mining or not.

That is not the case now. Not-for-profit organisations are forced to house their staff in caravans, and the shire is facing a problem of people living in cars or shipping containers, or camping illegally. Such people often have well-paying jobs, says Fiona White-Hartig, the newly elected shire president. ”But it’s just not enough to get them into that rental market.”

White-Hartig is also the president of Karratha Emergency Relief Organisation, which provides food and gas supplies to those in financial trouble. ”We can’t keep up with the demand. And they are people that used to be your middle-class kind of people, but they are struggling.”

White-Hartig says the local economy needs to diversify – she is particularly keen to boost the local tourism industry. But no tourist charter boats operate out of Dampier, despite the diving attractions of Dampier Archipelago.

”That’s really a microcosm of what we’re trying to do – by normalising the community the charter boat business can actually afford to live and operate out of there,” says Nationals leader Brendan Grylls, the state’s regional development minister.

How does a state like WA cope with the two-speed economy? Part of the answer lies in Royalties for Regions, under which 25 per cent of the state’s royalties are invested back into regional areas.

The policy came in after the 2008 WA election, when the Liberals needed the Nationals, led by Grylls, 38, to form government. When Grylls first hatched Royalties for Regions in 2006, 25 per cent of the state’s royalties was worth about $375 million. At the election in 2008, it had swelled to about $600 million. Now, it is more than $1 billion. ”This has gone better than I could have ever imagined,” Grylls says.

In the next few years, Royalties for Regions will pump $1 billion into transforming Pilbara towns such as Karratha and Port Hedland into ”modern, vibrant cities”, which Grylls argues will make it easier to attract workers to the north.

In Karratha, frantic work is under way on a host of new community assets – a new youth centre, recreation centre, family centre, and more and more housing.

A half-finished nine-storey tower, complete with crane, dominates Karratha’s skyline. It is the Pelago West, a $97 million, 114-unit luxury apartment development that will have pools and other ”resort-style” accoutrements. There is nothing else like it in Karratha, but it is a sign of things to come.

The developer, Finbar, is selling one-bedroom units in the Pelago for $600,000; the three-bedroom, two-bathroom apartments, which averaged $975,000, have sold out.

For a new ”luxury” home in Karratha, these are not bad prices; at the local real estate agent, a basic two-bedroom fibro ”townhouse” is for sale at $459,000 (currently rented at $750 a week), and a modest, two-year-old four-by-two is selling for more than $1 million (currently rented at $1900 a week).

What will be Karratha’s main street, with trees and alfresco dining, is currently an unremarkable thoroughfare. What will be a developed waterfront is now an expanse of red dirt and mangroves. There is no cinema in Karratha, and few places to lunch – at least not alfresco. Vibrancy seems some way off.

When the infrastructure is all built, Graham Evans says, ”it will be a good thing. It should have all been put in place 10 years ago. They waited until there were too many people here before they did it.”

Evans has doubts about whether the long-standing locals are getting a fair share of the boom. ”My opinion is that they feel a little bit left out. You get people who fly in and fly out, they are fed and given housing allowances, but a lot of average people don’t get the big dollars, and the cost of living is still high.”

Pelago West overlooks Warambie Estate, a new development of 100 homes built for ”service workers” employed in government, non-government organisations or local businesses.

The houses are closely packed, identical and tiny – they seem smaller than some of the boats parked next to some Karratha homes. And they are not, strictly speaking, cheap – the rent is between $300 and $500 a week, depending on the number of bedrooms. ”It is still a lot of money, but compare it to $1500 to $2000 a week, that’s quite cheap,” White-Hartig says. ”It is fantastic, but the reality is we could have another 300 and barely scratch the surface of the need.”

It is the oldest town in the shire, Roebourne, that remains its most disadvantaged. Roebourne’s population, 75 per cent of which is Aboriginal, also lives with the high cost of Pilbara living. But it also lives with the legacy of Roebourne’s tragic history – dispossession, oppression, deaths in custody. Alcoholism, domestic violence and poverty linger.

Royalties for Regions has reached Roebourne, and the mining companies are channelling funds into the community.

There are indigenous job programs, and land access agreement between traditional owners and mining companies. The asbestos-ridden shacks of a notorious part of town called ”the village” are being torn down and replaced with new homes. There’s a new youth centre, and on the edge of town, a 400-lot housing development owned by the Ngarluma Aboriginal Corporation.

Yet Roebourne’s community organisations struggle to provide services and to keep staff, who are the subject of regular poaching attempts from mining companies. As hard as businesses like Australian Marine Services work to keep staff, non-government organisations like Roebourne’s Yaandina Family Centre have it even harder.

From Roebourne, the distance to policymakers in Canberra feels particularly vast. For 12 years, Yaandina has been trying to raise funds for a new residential aged-care facility in Roebourne – a place where, due to the health and social disadvantages faced by Aboriginal Australians, the ageing process kicks in at 45.

”We hear about this two-speed economy all the time,” says Veronica Rodenburg, Yaandina’s chief executive. ”This is the third speed here. We arguably work in the richest place on the planet, but we work amongst the most incredible levels of poverty and dysfunction.”

THE economic divide between the mining and non-mining parts of WA – the Karrathas and the Albanys – is stark. At the last census, Karratha’s median household income was $2010 a week, while Albany’s was $846 – a gap that is likely to have expanded in the five years since. Karratha’s median house price is $777,500, says the Real Estate Institute of WA. Albany’s is just $365,500.

This year, 800,000 people will pass through Karratha’s airport. At Albany, 57,000.

But there is a tantalising possibility that the mining boom will arrive on Albany’s doorstep. In March, Tasmanian iron ore miner Grange Resources will announce whether it will go ahead with a $2.6 billion magnetite iron ore mine at Wellstead, about 90 kilometres from Albany.

If it happens, it will be huge. The mine will need 600 workers, its own desalination plant and water pipeline, its own power line from the coal generation hub of Collie 300 kilometres away, and a pipeline through which the magnetite slurry will travel to Albany port. Hopes are, understandably, high.

In the meantime, the newly elected mayor, Dennis Wellington, has other plans to bring the mining boom to Albany. He is touting the city as a FIFO base, pointing to its relatively affordable housing – compared with up north – and range of schools.

”One of the things that’s been said about Albany for a long time is that it’s got a lot of potential,” Wellington says. ”But you can’t eat potential, you’ve got to realise on it. And in the next five years we’ve got to realise on our potential.”

Right now, Albany is getting the raw end of the resurgent mining boom. The high dollar is tempting tourists overseas, especially to Bali – just 3½ hours from Perth by plane, compared with a 4½-hour car trip to Albany.

Local retailers cannot remember a time so quiet. Last year, the wheat, sheep and canola farms that surround Albany were hit by a severe drought, hobbling the agricultural sector that accounts for almost half Albany’s economy. A better harvest is expected this year.

The GFC was not kind to Albany, whose local council lost hundreds of thousands of dollars in investments linked to the US subprime mortgage market, sold to it by the now-defunct Grange Securities. The GFC also helped finish off the timber managed investment scheme spruikers Timbercorp and Great Southern, which had big operations in Albany.

And it scuttled plans for a new luxury hotel on Middleton Beach, at a site where the town’s only four-star hotel, the Esplanade, once stood. It was demolished in 2007 to make way for the bigger complex that never eventuated, and the site is now a gaping, weed-strewn patch, protected by a high fence. Locals recently hung socks in the fence in protest at the situation.

Thanks, in part, to Royalties for Regions, Albany has a new entertainment centre and it will soon have a new hospital. But it remains without a four-star hotel – an embarrassing situation for a tourist town.

”If things don’t pick up by January, I’m going,” says Elton Woodhams, the bobcat driver. He loves Albany, but it also has its frustrations – nothing ever seems to get off the ground. But if he and Katie move north, he will lose his hard-won contacts and clients. And they will be adding to one of Albany’s biggest, longest-running problems – the departure of its youngest, brightest and most productive residents. Once, they left to find their fortunes in Perth. Now they travel north to the mines.

According to WA government estimates, Albany’s unemployment rate rose in the three months to March this year from 4.6 per cent to 5 per cent – the highest in at least five years. But with a median weekly household income almost $200 a week below the national benchmark, many of those struggling in Albany are people with jobs.

”Most of my clients used to be low-income earners or people on disability payments or Centrelink,” says Diane Daly, a financial counsellor with Anglicare’s Albany office. ”There has been a big change. We are now seeing couples with families that are both income earners who we would call ‘middle class’, struggling to keep on top of things.”

This year, Melbourne think tank the Grattan Institute cast a critical eye at Royalties for Regions, and other government programs designed to ”kick-start” regions losing out in the patchwork economy.

It questioned the wisdom of investing so much money in ”lagging” regions such as Albany and remote places like the Pilbara, warning of ”significant risks” in the ”very expensive” strategy.

Says Grylls: ”I think they are wrong, and I will use every waking moment of my political career to prove them wrong.”

EVEN as WA is becoming more confident about its new-found economic clout, resentment is growing about what is widely seen as a lack of understanding of its situation in Canberra and the ”eastern states”. The carbon and mining taxes have not helped this perception, nor has the row with the federal government over WA’s move in May to boost state royalties on iron ore.

There is a deep belief that WA is shouldering too much of the burden of propping up the weaker states in the federation, and that it is being deprived of funds it needs to build infrastructure to drive the resources boom.

This financial year, WA received 72¢ in the dollar back from its GST contribution; WA Treasury forecasts WA’s dividend to drop to 33¢ in the dollar by 2014-15 – an amount both sides of WA politics decry.

”That’s money we need to build the infrastructure, to allow the industry that generates the wealth to keep generating the wealth,” says state Treasurer Christian Porter, who wants the issue looked at in the GST review currently under way. Last month, Porter’s update on WA’s economy revealed a $325 million operating surplus, but a $315 million jump in public sector net debt to $12.3 billion. It is a result, Porter says, of the government’s spending on the infrastructure needed to ”keep this kind of growth going”.

There is a parallel between the WA government’s attempts to ”share the benefits” of the boom throughout WA, including with Royalties for Regions, and the federal government’s efforts to spread the mining wealth through measures such as the GST and mining tax.

But take too much money out of WA, the state government cautions, and the national economy will suffer. The loud warning is that if WA cannot keep up with its own boom, investors and mining companies will take their capital elsewhere. ”If that happens … that growth will be lost to the country forever,” says James Pearson, chief executive of the WA Chamber of Commerce. ”It won’t reappear in a marginal electorate in Sydney or the back of Bourke. It just won’t go ahead, because capital is footloose and Australia is by no means the only country with iron ore, coal and natural gas.”

But this argument is hard to swallow on the east coast. Patchwork economy or not, WA currently boasts an enviable set of economic figures. WA Treasury is forecasting the state’s economy to grow by 4.5 per cent this financial year, and by 4 per cent the year after. Australia’s forecast GDP growth rate of 3.25 per cent this year and next looks anaemic by comparison. Unemployment in WA stands at 4.2 per cent, nationally it is 5.2 per cent.

”The bottom line is that the growth is overwhelmingly a good thing,” Porter says. Lower, middle and high-income workers in WA all earn more than their interstate counterparts, he says, an advantage that remains, even taking into account the state’s higher costs of living.

But the state opposition says many West Australians are missing out on the spoils of the boom.

”A resources boom can widen inequality in a society, and societies becoming more unequal, suffer more social problems. I think that’s the danger,” Ripper says.

Ripper was treasurer when the boom took off in 2006, which sparked a damaging real estate frenzy from which Perth is still recovering. ”My judgment at the time was that a boom is not good news for everyone – it can be bad news for a lot of people.”

Sourced & published by Henry Sapiecha

NOTE-From the editor

All this need for skilled people in the mining sector and there are many people I personally know who have to go through hoops to even get an interview for a job in mining environments.
I get sick & tired of these wingers and poor me attitudes of people in mining environments & bragging about the money they make.
Very competant people with degrees and work/life experience as well as an enthustiastic attitude are having to answer to 18year olds who take job applications and process  them.
They [The 18year old] then assess the applications and qualify the applicants input.
The system is a joke as are these ’18year old ‘ morons appointed to process the applications by some jerk off agency which is barely qualified or experienced.
How degrading is that?  The ‘Lang’ Hancock camp in WA would shudder at the thought.
The mining job industry is a tough seat of the pants environment, but it has been hijacked by ‘job processors’ who allow so many good hard working people to fall through the cracks. We have the people here to fill your needs
Get a grip and reform the mining job assessment process. Sure you want to weed out the incompetant & undesirables but you are doing it at the expense of great people with a lot to offer the mining industry.No wonder your sector is always screaming for more people.
I have no sympathy for you. CHANGE THE PROCESS-DO YOU HEAR ME…?
If you people in the mining scene are serious about getting good people into your work environment then contact me. Henry Sapiecha
You seem to be in different world because you  and I are separated by these ‘agencies’ who have created a niche for themselves in assessing the applications of genuine job seekers.
They [agencies] are necessary but please change the selection criteria and the assessors training or the selection criteria
Another very serious drawback is/are the entities which specialize in extracting high fees for these so called training courses that have to be done @ very high $$$ costs to even get a look in with the mining companys.
The Australian Qld government also is spending millions of dollars on promoting mining jobs and it seems like a total waste of money in that they are feeding us all this crap about jobs available in the mining industry, yet qualified persons are ignored as ‘unsuitable’.
That mine sector talk about getting in overseas workers etc.
You have got to be kidding when we are screaming for work and jobs.
What is it you do not understand????
The delegation of screening mining job applicants is flawed in its structure & application. CHANGE IT…


Friday, December 2nd, 2011

Chinese manufacturing activity has contracted for the first time in almost three years, adding to fears about the health of the global economy.

The decline comes a day after the US Federal Reserve led a co-ordinated move to ease global liquidity concerns – particularly in Europe – and the Chinese central bank loosened monetary policy.

Chinese government data released on Thursday showed that the official purchasing managers’ index fell to 49 in November from 50.4 in October. The worse than expected fall marked the first decline since February 2009. A reading of less than 50 means the manufacturing sector has contracted.

In a surprise move that was clearly timed to offset the negative impact of the PMI number, China’s central bank on Wednesday kicked off a new round of monetary easing by announcing a cut in the reserve ratio for banks for the first time in three years.

“The markets have been handed a powerful one-two combo, in the form of a shocking PMI print and an aggressive RRR cut,” said Alistair Thornton, China analyst at IHS Global Insight. “The message is clear: the economy is slowing much faster than expected and the government has stepped into the ring.”

Most analysts did not expect monetary easing to begin until at least the first quarter of next year , but Beijing is facing the prospect of a stall in its two biggest growth engines – exports and real estate. Policymakers are now more concerned about supporting growth than tackling inflation and are expected to announce more monetary loosening measures in the ensueing months.

That reverses two years of gradual monetary tightening in which the government has been trying to cool growth and rein in persistently high price increases in a campaign that appears to have been largely successful.

The FTSE Asia Pacific excluding Japan index jumped 4.2 per cent by early afternoon in Hong Kong, taking its cue from a 4.3 per cent surge in the S&P 500 overnight and a 5 per cent jump in Germany’s Dax.

In Tokyo, the Nikkei rose 2.1 per cent to 8,614.62, while in Seoul the Kospi jumped 4.1 per cent to 1,922.55. The best performer in the region was the Hang Seng, which surged 5.6 per cent to 18,991.10.

Stephen Green, economist at Standard Chartered, said the decline in Chinese manufacturing “looks like the nasty scissors of lagging wage hikes and poor orders” affecting the small and medium-sized business sector in the country.

Underscoring the impact of the eurozone crisis on China, David Liu, president of Luca Angelo Leather, a company that makes mid-priced handbags in China for export to Europe, said sales to the continent had declined by between 30 and 40 per cent over the past two months.

By reducing the amount of deposits banks must hold on reserve by 0.5 percentage points, the central bank in effect injected about Rmb400bn ($63bn) into the banking system so that lenders could extend more credit to the slowing economy.

A parallel PMI survey compiled by HSBC also fell in November, dropping to 47.7 from 51 the previous month. The reading was the lowest since March 2009, and slightly worse than a preliminary reading of 48 issued last week.

JPMorgan analysts said they expect consumer inflation to be about 4.5 per cent in November, down from 5.5 per cent in October and well below the peak of 6.5 per cent in July. The input prices sub-index of November’s official PMI, an indicator of inflationary pressure, supported that forecast, declining to 44.4 from 46.2 in October.

But pulling down inflation has come at the cost of a steeper than expected drop in growth. In a sign that the economy is likely to slow even more in the coming months, the new orders sub-index fell 2.7 points to 47.8, while the new export orders sub-index dropped 3 points to 45.6.

Exports to the EU and US, China’s two largest trading partners, have decelerated in recent months and the fall in export growth to crisis-hit Europe has been particularly pronounced.

Meanwhile, real estate sales volumes have dropped sharply across the country and more than halved from a year earlier in some large cities while prices have also started to decline.

Although construction growth in the country has held up until now, most property developers appear to be delaying new projects, raising the prospect of a halt in housing construction that could be devastating for the overall economy in China.

Real estate construction accounted for around one-quarter of all investment in China last year and about 13 per cent of GDP.

Sourced & published by Henry Sapiecha


Thursday, December 1st, 2011


ASSESSMENT – Peru has a very rich precious metals background. This diverse nation in the Andes, once a victim of Spanish looting, is now the biggest silver producer in the world, the second largest copper and zinc producer and the sixth largest gold producer. The wealth of its mineral deposits stems from  dramatic landscapes consisting of soaring mountains, winding valleys, stark deserts, mysterious jungles and isolated coastlines. More than 7% of global mining exploration occurs on this unforgiving terrain, where historical production collides with modern geological technology. The Peruvian mining industry represents about 60% of the country’s export earnings.  Earnings from mining are expected to grow 6% annually through 2011-13.

But with a landscape as diverse as this, miners have to pick and choose locations carefully.

Ancash & Cajamarca Regions

Two regions which should be on the radar of eager gold and silver investors are the Ancash and Cajamarca in northern Peru. Both Ancash’s and Cajamarcas’ economies are largely made up of gold, silver, copper, zinc & precious metals mining.

Gold and silver production and exploration in these regions are a clear example of the investment and muscle needed to survive in the Peruvian Andes. This high-elevation, mineral rich area, which has been on the list of eager juniors for decades, currently persists mainly on the activity of the world’s two biggest gold miners:

Minera Yanacocha – Newmont Mining

Newmont Mining’s [NMC – TSX] legendary Yanacocha mine is a joint-venture project with Peruvian Company Buenaventura and the International Finance Corporation, which own 43.65% and 5%, respectively. Yanacocha is the largest gold mine in Latin America and is not only considered to be the second largest gold mine in the world, but also one of the most profitable.

The Yanacocha consists of three active open pit mines, with production having exceeded 26 million ounces (US$7 billion) since the mine opened in 1993. Located only 48 kilometres from city of Cajamarca, the mine produced 1.5 million ounces in 2010 and has reported 5 million ounces of gold reserves as of December 2010.

Considering Newmont’s recent stock rocketing in the past six months, buoyed by positive third-quarter results and ongoing production and exploration around the globe, the Company’s stock price may scare away smaller investors. Then again, the recent dip below $70 could also be seen as a gift by many who believe gold is about to go parabolic in the face of worldwide currency destruction.

Pierina – Barrick Gold

Not to be outdone by its competitor, the world’s largest gold producer, Barrick Gold Corp. [ABX – TSX], has two key mines in the regions: Alto Chicama & Pierina. Of the two, the Pierina’s mine life has recently been extended to the end of 2014 due to the rising gold price and increased interest in Peru’s gold possibilities. An open-pit operation, Pierina produced 191,000 ounces of gold at $434 per ounce in 2010 and recorded proven and probable mineral reserves as of December of 791,000 ounces of gold. Considering that Barrick recently reported record net earnings of 45% to CAD $1.37 billion for the 3rd quarter, investors should look for future exploration and increased production in the Ancash region.

Much like Newmont, investors may hesitate on following such a high-priced stock. But judging from Barrick’s recent price volatility, a result of the volatile yet upward-moving gold price, there are plenty of opportunities to catch the stock on the dips.

Yanamina Gold Project – Coronet Metals

For those with shallower pockets and hopes for higher gains, Coronet Metals [CRF – TSX.V] offers an alternative to the nearby majors that may add another producing mine to the Ancash region. A junior gold exploration and development company, Coronet is presently developing its Yanamina Gold project, which Coronet recently purchased from Latin Gold Limited. Yanamina is an advanced-stage project with an initial inferred and indicated resource of approximately 286,000 ounces of gold grading between 1.6 and 2.0 grams/tonne and 1,400,000 ounces of silver grading on average of 8 grams/tonne.

The project represents an ideal opportunity to catch the attention of the two previously mentioned majors, as it is an open pit, heap leach gold operation. Exploration on the area has revealed a low sulphidation epithermal Au-Ag deposit, with indicated ounces mentioned above, and substantial upside potential. Coronet reports good existing infrastructure in the region, along with an proposed mine life estimate of 8+ years.

On top of the development of the Yanamina project, Coronet has also recently announced an agreement to evaluate re-processing up to 950,000 of gold tailings in Peru. The project is located 16 km below the Yanamina project and will give Coronet the opportunity to demonstrate its adherence to corporate social responsibility and best practices in the area. Mr Joel Dumaresq of Coronet says, “ This low-capital project could move Coronet into gold and silver production with the objective of generating sufficient free cash flow to cover the Company’s overhead. The contractors are already approved and completion of due diligence is targeted for Q1, 2012.”

2011 And Beyond

As the Yanamina gold project and the re-processing of gold tailings unfold, expect to hear a growing buzz of expectation from the Ancash region.

As the global gold hunt heats up in the face of financial calamity, well-placed juniors such as Coronet may deliver significant rewards to schrewd punters

Sourced & published by Henry Sapiecha