News: MAH Emeco Says Macmahon Deal Will Result In Pre-Tax Non-Cash Impairment, page-5

I'm wondering if anyone is willing to engage with me on some musings over the mining cycle, something which I know little about and should better understand given my holding in this cyclical stock.

MAH is diversified across commodities, which on first look should provide some protection in a downturn, primarily because they are heavily weighted towards gold, the price of which is not tied so intimately with economic production such as steel and met coal. They have been engaged by a client mining lithium and may trend towards further 'future facing metals' such as nickel and copper over the coming years.

My concern with this stock is that it looks very cheap. David Lynch is often quoted as saying that when cyclical stocks look cheap on a multiples basis, this is when they are in fact most expensive, as we are at the top of the cycle, and buyers are unwilling to push the price higher due to the risk of an impending downturn. When the multiples are high, this is an indication that the stock is cheap, as its earnings base has been crushed so badly that it looks expensive even on a brutal sell down.

I'm wondering how this sits with MAH, and the current state of the mining industry in Australia. As I mentioned above, MAH is somewhat protected from diversification, but is this in fact an illusion. What happens to the workers and equipment when a steel mine has been shutdown. Can they be redeployed to a gold mine. Does this mean increased competition for the same work and therefore less work and lower margins for the work that is secured? How does the future look for MAH?