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'I hope our miners can last the distance until India takes off...

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15,757 Posts.

14/04/15

14:09

Post #: 15084608
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Originally posted by loki01 ↑

I wonder if it is illegal for China to subsidise its iron ore operators under the WTO rules? If it is illegal will the Oz govnuts take China to the WTO court system to get compo for our producers for the loss of profits they incur as a result of the Chinese production subsidies?

On another note - RIO is definitely not an Australian company, even if it gets most of its profits from digging up dirt here. BHP used to be an Oz company but with the reverse takeover by Billiton it is basically a foreign owned company with possibly only 10-15% actual Oz ownership. The Chinese govt has a 15%+ stake in BHP via Chinalco's Singapore subsidiary. The level of their ownership increases due to share buybacks having reduced the number of shares on issue, and may now be as high as 20%.

We need a resource rent tax, a limit to foreign ownership of our mines (as well as all other assets). These issues will only get hotter over time and I think there is a danger a future govt will remove the diesel fuel tax rebate concession which is worth perhaps $500-1000 million to the IO industry.

Our govnuts have wasted to benefits of our mineral resource boom - in fact they have destroyed our economy by not ensuring that the AUD appreciation did not hurt our manufacturing sector. Plus the guvnuts have generated a massive property boom based on selling city property to overseas interests that can only lead to a higher level of debt, particularly as the banks are borrowing money from overseas to fuel this boom. The cost of building the city infrastructure and pay for social welfare benefits for the increased population imported into in the cities is being funded by selling our social assets (ports, electricity systems) to overseas interests under the scam of "recycling assets".

I guess the bottomline is that we must have the stupidest govt in the world and possibly one of the most corrupted given how many of our pollies work for overseas interests once out of office (Hawkeating working for China as is Downer while others no doubt work for the US).

I think BHP is in trouble (along with its high dividend) with its large debt and high level of accounts payables if commodity prices go lower. However their interest payments are pretty low, for now, as they still have a great credit rating.

I thought the dividend yield story would keep BHP's share price above $30 for longer, but I have been proved wrong.

I agree this downturn was foreseeable - it is a cyclical industry and China was always going to learn how Japan managed to control the price of its suppliers by encouraging massive oversupply and forming a buyers cartel (Japan/SKorea/Taiwan).

I hope our miners can last the distance until India takes off economically and can provide them with the get out of jail card.

loki (I am a buyer of BHP at $19.80 - just another year or two to get there, I suppose)

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'I hope our miners can last the distance until India takes off economically and can provide them with the get out of jail card.'

India won't/can't compensate for slowdown in China. The two countries are very different.

AGO Price at posting: 12.0¢ Sentiment: None Disclosure: Not Held

BCI Price at posting: 26.0¢ Sentiment: None Disclosure: Not Held

BHP Price at posting: $29.13 Sentiment: None Disclosure: Not Held

FMG Price at posting: $1.80 Sentiment: None Disclosure: Not Held

RIO Price at posting: $55.16 Sentiment: None Disclosure: Not Held

SDL Price at posting: 1.9¢ Sentiment: None Disclosure: Not Held
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