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February 10, 2023

What You Missed in the News This Week

The West Australia government fears heavy rains could wash polluted water from Alcoa mines into the state’s biggest dam, making the water undrinkable.

The US aluminium giant that mines bauxite within 300 metres of the water’s edge at Serpentine Dam changed its methods about five years ago, increasing the risk of sediment flowing into the dam.

If the water was contaminated, it would cost taxpayers up to $2.6b and potentially take years to fix.

Battery Age Minerals has appointed Nigel Broomham as it’s General Manager of Exploration.

Broomham will spearhead the exploration of its portfolio of international batter metal assets.

Battery Age CEO Gerard O’Donovan said “Nigel is a highly experienced geologist who played an important role in the exploration, development and operation of Pilbara Minerals’ world-class Pilgangoora lithium project,” he said.

“He brings extensive technical geological expertise, strong commercial acumen and considerable energy and enthusiasm – all of which will be invaluable as we embark on our growth journey as a diversified battery metals company.”

Aerison Group has been awarded multiple new contracts for projects in Western Australia and South Australia, totalling $100m.

The projects involve the rare earths, agricultural, green energy and chemicals sectors and includes the Yuri Green Hydrogen project in the Pilbara.

Aerison CEO Giuseppe Leone said “These contract awards are an important step in delivering our industry diversification strategy, with an increasing focus on the critical mineral, agriculture and chemicals sectors.”

Newcrest has received a $24B takeover offer from rival gold miner Newmont.

The offer would entitle Newcrest shareholders 0.38 Newmont shares for ever 1 Newcrest share they own.

Newmont president Tom Palmer said “The proposed transaction would join industry-leading portfolios of assets and projects to create long-term value across the combined global business, and we welcome the consideration of Newcrest’s board of directors.”

Hancock Energy is the sole bidder for the takeover of Warrego Energy after Strike Energy bowed out this week.

Mineral Resources and Beach Energy were both contenders but pulled out last month.

Strick Energy will still walk away with $116m from their shares worth 25.99% voting power.

The S&P/ASX200 markets closed lower today after a disappointing week.

Starting off at 7,560 points on Monday, the markets fell throughout the week to end on 7,434 points. The markets still sit 479 points higher than the start of the month.

The All Ordinaries closed lower too, at 7,631 points, though still higher than the last 6 months.

The gold price remained steady after the dramatic fall last week, hovering around $1,875USD, before finishing at $1,866.15.

Silver has remained steady, rounding off the week at $22.34USD.

October 21, 2020October 21, 2020

Today’s Top Story – Does The Corporate World and the Media Treat People Fairly Anymore?

Today I thought I would look at how the media and some corporations treat people and ask; Is that really fair?

For example, the media in the last day or two have been all over the case of Channel Nine News director, Darren Wick, who was charged with a high-level alcohol driving offence that occurred last Friday evening. Mr Wick has since come out and said that he has realised he has a drinking problem and taking steps to address it.

Prior to this, if you had surveyed all of Australia and asked; “Who is Darren Wick?’ the vast majority would have said, Who? Yet here he is having his personal life splashed across the media; and of course, it was their competitors doing most of the wailing. Don’t get me wrong, I in no way condone drink driving and what he did was reckless. But did he deserve the attention he got? He is not a public figure. He is not a prominent person even if he does influence how news is delivered by Channel Nine.

If the Prime Minister was caught doing the same, I can see the rationale behind it being a story, but the prominence given to Mr. Wick was disproportionate in my opinion. One thing I can say is good on him for being so candid.

I would like to talk about a footballer at AFL level now who has been banned from playing football for about 400 days and still no charges have been laid or an end in sight to when it will be resolved. West Coast player, Willie Rioli, has been accused of tampering with a urine sample he was asked to provide in August 2018. He was stood down in September 2019 after he received a second breach for testing positive to cannabis.

Neither of the two accusations have been tested at a tribunal or any other forum where he can try and clear his name or accept responsibility for what has happened. The AFL has wiped their hands of it saying that ASADA has responsibility for how and when the case will proceed. I thought the AFL controlled the AFL not ASADA.

Apparently because of the way the AFL is structured, and the agreements clubs and players have with the AFL, there is no legal recourse to make the AFL act quicker. As for ASADA, they apparently don’t care that a player has literally been left on the sidelines for so long, that it could affect his future, not only with the club, but life after footy.

Surely ASADA isn’t inundated with cases to the point that a back log of such magnitude exits. Surely it doesn’t take 400 plus days to analyse a “B” sample and report back to the AFL. If this is the case, there is a case for AFL to move away from the ASADA regime and start their own testing facility that they can exercise their own timelines on.

On top of all this if the eventual charges are proved he could face a four-year ban that will effectively end his career. I don’t know if time already banned from the game will be taken into consideration when issuing a ban, but I hope for Mr. Rioli’s sake it will be.

Because Mr. Wick is going through the court system, he will be dealt with quickly, even though it is a serious charge, he has publicly acknowledged the facts and the courts can deal with cases like this quickly. In most cases like this it is the defendant that causes delays, if there are any.

With Mr. Rioli, it is a case of not even been charged with an offence or offences and no prospect in site, as those responsible for carriage of the case drag their feet. No Charges – no play doesn’t sound fair to me.

These are just two examples of people being harshly treated by media and corporations, in my opinion, that have little empathy or sympathy for the people involved. There are countless others who have been in similar situations that have had their lives changed forever.

Written by Gary Brown.

October 20, 2020October 20, 2020

Tonight’s Top Story – Are We Over-Governed by Politicians and Bureaucrats in Australia and at What Cost?

We have a federal government; each state and territory have a government and there is a myriad of councils and shires in each as well.

Each level of government has its own responsibilities however there is a lot of crossover in some areas. Take for example health and education. The federal government provides a lot of the funds that each state and territory government need to operate these sectors. Although the feds provide the bulk of the finances it is the states and territory governments that are responsible for them.

In health you have a bureaucracy at federal level determining what level of funding should be allocated where. In particular the feds are responsible for funding hospitals, but the states run them. You then have another bureaucracy at state level allocating the funding to each public hospital and of course another bureaucracy within each hospital allocating funding to the various departments. That is a lot of money being spent from the allocated budget before one patient receives a benefit.

And for education the process is repeated, again with a lot of money being spent before one student lifts a pencil in a classroom. Then there is the political argy-bargy that goes on between state and federal counterparts in the sectors. Each minister in each sector would have a plethora of advisors, media and administrative personnel so the minister can be across their brief and take pot-shots at others over how their administration is better than the others. More money out the door before it gets to be used on grassroot purposes.

At the recent Hotel Quarantine Inquiry in Victoria a complicated bureaucratic system of decision making has been revealed. The end result was a disaster that no one is keen on taking responsibility for. Now I am sure that this level of bureaucracy is not unique to Victoria and there will be other jurisdictions that have the same complexity of administration in various areas. This again highlights the theme of a lot of money being spent before what is left over gets an outcome.

The public service juggernaut in Australia sailed through the Covid19 restrictions without a scratch. While other sectors were laying off people, reducing hours or closing down, the fortnightly paycheque for public servants kept on being deposited into their accounts. All hell broke out in NSW when the government put a freeze on public service wages during Covid19. Unions threatened industrial action, not satisfied that they didn’t have to take the risks like those in the private sector. Secure in their jobs and with no pay cuts it riled many that were suffering through no fault of their own.

At the local level the various shires and councils that look after their patches are too many in some states. In WA there are 138 councils. Yes, WA is a big area but some of these shires cater for a population of 300 ratepayers or less. The WA government has flagged that they are amenable to reducing the number of shires to make it more practical. Peppermint Grove Council in Perth’s leafy western suburbs covers an area of one square kilometre. (That is not a typo). It has revenue of only $5M and at last count had 24 employees. Surely it would be a candidate to merge with another council, in fact as part of a merger of a few councils in the area. The government is also keen to reduce the number of councillors that sit around the table.

I suppose the point I am trying to make is that at all levels we have too many politicians and too many bureaucrats that waste money that could be going towards the myriad of projects that need the money more.

October 16, 2020

Today’s Top Story – When Will The WA Bubble Burst?

Who would have thought six months ago that the words “travel bubble” would have been used so prolifically, yet alone anyone even thinking of it? Yet here we are talking about it, hoping that these bubbles will open up between states and glory be internationally.

Western Australia has lived within its own bubble since almost the beginning of the Covid19 living regime. Early on in this timeline the state was split into regions with travel restricted to within each region only, unless an exemption was given. And exemptions weren’t given out easily as the government was determined to contain the virus. Eventually those travel restrictions were lifted except for some remote communities and people were free to move around the state.

But restrictions still apply for people trying to enter the state and an exemption must be granted. If, however you have been in Victoria you must have a more valid reason than just wanting to visit.

The travel restrictions in WA have had a significant affect on FIFO operations and workers. Companies have started to employ people only living in WA and some have encouraged their interstate FIFO workforce to consider relocating to WA to avoid quarantining when returning home. Decisions like this cannot be taken lightly and peoples’ livelihoods are being affected the longer it goes on. Some people will be suffering economic losses for years to come – let alone the mental anguish that comes with it.

Conversely, those workers who travel from WA to other states for FIFO work are spending most of their time back home in self isolation, which for most of them means having no social interaction until the restrictions are lifted. Some people have likened it to house arrest, and it is likely to stay in place until mid-next year if the premier sticks to his guns.

Not mining related, but WA people are now exploring more of their own state rather than taking cheap international holidays or flitting over east for a Gold Coast fix or to watch their favourite football team.

It is this writer’s opinion that some borders should be opened up without the onerous restrictions that are still in place even when coming from the Northern Territory or South Australia. Their Covid19 transmission rate is the same as WAs, which makes them ideal jurisdictions to have free travel with. All their recent cases have been from returning overseas travelers, the same reason for all the cases currently in WA.

Speaking of overseas, there is now talk from the federal government to looking at travel bubbles between some international locations. New Zealand is an obvious location to allow this to happen and obviously places the likes of Brazil, USA and England would not be contemplated at the moment. Other places that are up for consideration are Singapore, South Korea and Japan who all seem to have their Covid19 response well in hand.

But what the federal government wants and what the state and territory leaders allow could be two different things. A staged process of opening up Australia to other nations needs to be considered now, otherwise restrictions good last for years if a vaccine is not found.

More businesses will flounder the longer restrictions are kept in place, whether that be interstate or international travel. NSW, ACT and NT are opening their borders to New Zealand as of today, which is a positive step for those jurisdictions.

Australia is the lucky country, there is no mistaking that, but let’s not turn it into a basket case – let’s look for innovative ways we can open the borders.

October 9, 2020October 9, 2020

Today’s Top Story – Western Australia continues to be the envy of the world.

The price of iron ore has never been so important to the Western Australian economy as has been evident in the recently announced state budget. On the back of soaring iron ore prices, the state government collected nearly $8.45B in royalties from the miners who exported millions of tonnes of the ore to overseas markets, in particular China.

The forecast for the next 12 months shows a similar amount of royalties will be collected before prices start coming off their highs in 2022, or earlier. It has been a huge windfall for the state and has cushioned the impact of Covid19 on the economy. While other states’ economies have wallowed, Western Australia has powered on and even produced a healthy surplus for the last financial year.

Whether it was good planning or luck, the decision by the state government to keep miners going, at almost any cost, has proven to be a master stroke. It didn’t matter if they were mining gold, copper or any other mineral or iron ore, miners ploughed ahead as other industries took a hit. Fortunately, the mining industry kept alive manufacturers and industry related to the sector.

The state government cannot be complacent though, as it would not take much for the price of iron ore to come off the boil or buyers to disappear. If Brazil can get Covid19 under control and exports crank up from them, China could well look away from Western Australia as their main source of the ore. With the sometimes-delicate relationship we have with China it could mean they hit us in the wallet – just because they can.

The price per tonne of iron ore reached a low of $37USD in 2015 and has since soared to be currently sitting at $122USD. Miners are making the most of it as well as the government and mine expansions are on the increase to cash in on the bonanza.

The miners are also tackling the issue of staffing as the FIFO experience has shown that having workers self-isolate when they travel from interstate is proving costly and is in no way practical. It isn’t good for workers either who are spending more time away from family, if they are able to travel from interstate. This is making the companies rethink their strategy of employing someone no matter where they live in Australia and encouraging workers to pack up and move west.

This is creating problems in the housing market across the board as rental vacancies have reached extremely low levels in Perth and major regional centres. Real estate agencies are experiencing the best sales figures in a long time but unfortunately for sellers the needle is yet to move on house prices. This will change as supply starts to dry up. It will probably mean a boon for the state government as stamp duty revenue is sure to increase for them.

During the last mining boom thousands of people flocked to WA to make the most of the circumstances. When mining went off the boil many returned to the east coast. Will we see the same happen again and will it be a short term hit or can it be sustained?

Already the unemployment rate in WA has fallen below the expected rate of 8% and likely to fall further if circumstances don’t change because of Covid19. With changes to Jobkeeper and Jobseeker being phased-in, unemployed people are more likely to seek out employment which will bring the rate down even further.

WA must surely be the envy of the other states, even if the borders are shut to the east coast. A healthy economy, tourism experiencing healthy numbers from WA locals and mining powering on it all looks rosy for the near future. Can the government make the most of it and plan wisely for that future?