SHIFT MINER SAYS THE OUTLOOK IS STILL NOT SENSATIONAL.... NO more mining services businesses have closed their doors in Mackay recently, but the outlook is still grim. “I think it’s just more of the same - a holding pattern,” said Group Engineering managing director Allan Ruming. “It’s being driven by a number of things. The dollar has not continued its downward trend, coal prices don’t seem to have bottomed out, and we have two idiots standing there fighting each other in something called the federal election.” Mr Ruming said even a change in government would do little to change the outlook in the short term. “The election is September, it takes a month to changeover so that’s the middle of October, then it’s Christmas so there’ll be no substantial changes to legislation or anything before next year. “That means this holding pattern is likely to continue for at least six months.” Mr Ruming said the only optimistic sign was 37 coal ships waiting to be loaded off the Mackay coast this week. The ships signify a dramatic step up in production at Bowen Basin coal mines as companies increase tonnages to combat a drop in price. However, the flow-on effect for mining services businesses is yet to be felt. “The theory is increased production increases the amount of wear and tear, but it’s not corresponding in a big increase in maintenance spending yet,” Mr Ruming told the WINO. “A lot of mine sites are not doing the big shut-downs and that sort of thing. But having said that, there was a lot of waste and inefficiency during the boom so possibly this is a reasonable example of where the new paradigm is. “But I suspect there is a fair amount of expenditure to come [in maintenance]. Forget about construction and new projects; there’ll be a big increase in maintenance costs and companies looking to improve efficiencies.” Mr Ruming’s own company has dramatically scaled back since the bust from a staff of 35 to just four. “We’re holding. We’ve gone from a massive freefall with no project work whatsoever with the small crew we have now very busy. But it’s a question of whether it’s enough to pay the overheads and the bills. “For now, we are surviving in a position to move forward if things pick up.” Mr Ruming said while he hadn’t heard of other local businesses shutting their doors over the past few months, the outlook for many was still dubious. “Anecdotally I am hearing from accountants and the like that there are still companies who are very, very close to the wire. “A big part of what we are seeing now is the norm and I don’t think people have got their heads around that yet.”
Posted on: Wed, 21 Aug 2013 06:39:25 +0000
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