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cherryburn

1,075 Posts.

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13/02/24

10:39

Post #: 72375767
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Originally posted by ValueSeeker1: ↑

Today's Advocate:

Avebury closure hurts, but some positives remain for workers and West
By Sean Ford
Updated February 12 2024 - 10:38am, first published 10:00am

The closure of the Avebury Nickel Mine is a disappointing, if understandable, development.The way nickel prices have crashed following a surge of cheaper product from Indonesia has forced a series of nickel mines onto care and maintenance.
Especially after last year's collapse of mine owner Mallee Resources Limited, Avebury's future in such a price scenario was always going to be limited unless pricing improved rapidly. A sale deal for the West Coast mine was not finalised and receivers and managers KordaMentha opted for care and maintenance.Receivers and managers cannot let a company keep losing money indefinitely, and have to consider creditors' interests.

(That said, the Mallee shareholders can expect a serious haircut.)

Innocent parties - more than 200 workers and their families - will have their lives disrupted.

The move will also hurt local businesses and supply chain businesses across the region and state.It can be hard to find positives in such a situation, but at least three come to mind.

The first is that if someone is going to lose their job, this is probably the best - or, rather, least bad - period for that in decades. That is because of the extremely low unemployment rate and the way virtually every industry and countless businesses are struggling to find enough workers.Also, these particular workers are highly skilled and will be in demand. The second positive is that Avebury will be back.

Nickel's time will come again, and so will Avebury's. The third is that the closure lends weight to the West Coast's extremely logical push to keep diversifying the local economy.Mining will always have ups and downs, and the area's progress in tourism and aquaculture particularly have helped its economy enormously in the last couple of decades. There is more to come too, shown by the area's growing appeal in mountain-biking and the arts.In that context, Mayor Shane Pitt makes a lot of sense when he pushes the state government to commit funding - and quickly - to help the West further diversify.

Tasmanian areas and businesses are often unhealthily keen for governments - with taxpayers' money - to be their saviours. But sensible economic diversification is desirable, and the West Coast's huge economic contribution despite a small population strengthens the argument.There are plenty of worse ways to spend taxpayers' money.

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Great to hear that mountain biking is so appealing and it will be more so in the future with John Lamb having sizzling sausages ready at the end of a cycling exercise. Has any shareholder heard from JL in the past 6 months ?

MYL Price at posting: 70.0¢ Sentiment: Hold Disclosure: Held
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