Got nothing to do with labor costs. Its got to do with Investment Capital and Risk Appetite. Australia, although as you point out, pays a lot more for labour, has an established mining industry with a track record of delivering product to the market place. With demand for coal declining, as a user would you rather buy from an established player, or a newbie? Remember, Coal is the same price whether its bought from Australia or Mongolia. Transport costs are not a huge factor when the product is declining in price. What you are more interested in is profit margins. BHP can absorb a lower Coal Price more easily than a start up who is seeing potential margins squeezed before they have proven the resource or even pulled anything out of the ground. Its happening right across the exploration sector unfortunately.....
NRU Price at posting:
0.8¢ Sentiment: ST Sell Disclosure: Held
