OK.
One of our major exports to China is Iron Ore. Given that our economy is underpinned by selling stuff from the ground to Asia it is not in our interests to take action that may affect this.
NOW. Bluescope steel is reducing production and laying off over 2000 workers citing that all of the mining developments etc are using imported steel made from Iron Ore we exported to the manufacturers.
What do you do? And discuss.
I don't think we can do a lot about it, apart from sticking a band aid on the problem - buy Australian campaign, give manufacturing some compo, drop official interest rates, more stimulus packages, tie some colored ribbons to your arial to show support etc.
Retail, manufacturing, real estate tourism and other industries are all going to struggle over the next few years. This is just the start and I don't think you need a crystal ball to see that it's going to get worse before it gets better.
At least in Australia we have mining to get us through this, while there is demand in China and India for our raw materials.
Bummer, labor back flipped on the mining tax.
For those interested you may want to read about Dutch Disease. It explains what is happening to our economy. Perhaps we are lucky right now to have such great natural resources to carry our economy through a hard global time but it is important to recognize that we need to support domestic manufacture and learn by the experience and mistakes of other countries.
en.wikipedia.org/wiki/Dutch_disease
"In economics, the Dutch disease is a concept that purportedly explains the apparent relationship between the increase in exploitation of natural resources and a decline in the manufacturing sector. The claimed mechanism is that an increase in revenues from natural resources (or inflows of foreign aid) will make a given nation's currency stronger compared to that of other nations (manifest in an exchange rate), resulting in the nation's other exports becoming more expensive for other countries to buy, making the manufacturing sector less competitive. While it most often refers to natural resource discovery, it can also refer to "any development that results in a large inflow of foreign currency, including a sharp surge in natural resource prices, foreign assistance, and foreign direct investment".[1]"
Yeah, that's what Australia should do. Stupid labor had the chance to do this and just rolled over when Twiggy and Reinhardt put some ads on TV, telling us they couldn't afford to send their kids to private schools.
www.theage.com.au/business/call-for-higher-mining-tax-and-sovereign-fund-to-rein-in-dollar-20110822-1j6o7.html
Australia isnt the only country blessed with an abundance of natural resources. The reason why people prefer to invest in Australia is because it is lower risk than countries in africa.
The profit companies make justifies the money the spend on capital (ei the risk they take in spending money to make more money). If the profit isnt high enough it does not justify the risk. By adding taxes, regulations, and such you decrease the return on this capital and as such dis-incentify foreign investment in Australia.
There will come a point when the lower returns received in Australia do not justify the lower risk achievable by investing here and money will go to other nations (this point may or may not be reached).
I would be more supportive of a mining tax if it was not used to fill holes in a budget but used for legitimate capacity increasing projects, making other industries more efficient (without handouts) or a future fund that cant be touched until there are no more resources. But in its current form it is exactly this a tax.
The money made by the big miners (BHP and Rio) by exporting Iron Ore is being spent in Australia on Australian expansion projects which generates more wealth for Australia. They pay very small dividends so very little amounts of the money is being offshored to foreign investors (the argument that is so often made). It is true that the resources in the ground belong to the state, but the state isnt going to spend billions of dollars and take a whole lot of risk to build mines, rail, ports, etc to get it out of the ground.
Good work Hayds... making too much sense in your last few posts...
I thought we had a future fund, and I also thought the Labs spent it on lollies, show bags and rides in some certain NSW establishments
I then googled it:
We got some goodens back the other way though
Manufacturing is suffering because of the opening up of the Australian economy, previously there were high tariffs to protect our manufacturing industry which forced us to buy goods made in Australia.
Not the case now, as bean counters are going to look at the cost bottom line with any large capital outlay. To them it just doesn't make sense to buy the "expensive" home grown when the import is cheaper.
As for the mining tax - massive loss of opportunity there. The opposition to it wasn't about anything else other than the protection of vested interest. The damage done by Twiggy, Gina, Clive and others will be felt by us all in years to come.
The chinese yuan is not market based and pegged at a low price against the USD If they revalue thyuan how will I afford the plasma I want?
^^^That "new" currency is gold - it punched through USD1900 this morning. The ramifications for WA's gold mines and miners are sure to ruffle a few feathers amongst those that blame mining for collapse of other industries.
In terms of resources trade... FMG have written already their first contracts for sale of iron ore in yuan.
Trade into AUS based on the mighty AUD is not far away.
Mining boom = Higher $AUD = bad news for local manufacturing + flow on effect.
It's a two speed economy. BHP to post $22B profit this week. That's $2.5million/hour, 24/365.
CMC is right above, trade tariffs would work [i]against[\i] us. We're cornered there.
I'm don't blame the mining companies, their job is to make a profit. I blame the Australian public. Dumb chickens they are.
Henry was right, Rudd tried, a couple of ads is all it took to spook the opinion polls and that may have been Australia's defining moment. We don't make anything here. We have no sovereign fund (like Norway). Interesting to see where we are at in 20 years. There'll be no crash, just a slow slump.
^^^Rudd and Henry went wrong in the delivery.
Zero consultation, mostly focussed on one market sector. Fools.
Someone "red thumbed" the original question... it's just a discussion topic !! If you disagree with Bluescope, then talk about it here, don't red thumb "cmc's topic"!
(I hit the green to get rid of it)
Anyway...
Coal is also a major export to Asia... As is LNG, Liquified Natural Gas.
Over time, we will also process less crude, and just receive finished products at the existing refineries. Similar to what Australia's oldest refinery at Clyde Sydney will become.... a finished product tank farm, and not a refinery! Basically, Clyde was made up of too many old pipes, vessels, and structures, and the cost to keep it going was getting too high, when compared to new mega refineries, with modern technology, and nearly 100 years of "lessons learned".
When I was at school - long ago. We studied Naru and Ocean Island in depth.
They were both almost identical islands made of super phosphate (sea gull droppings) on the equator. Super phosphate is an important ingredient in fertilizer.
Both islands were under different colonial rule - which didn't help things much. Both were mined to exhaustion. At the time people got rich beyond their wildest dreams, but there's nothing left now - just a heap of holes in the ground.
I think Naru did marginally better than Ocean Island as at least there is some land for the people to live on and they did make some ok investments, but both islands are completely rooted now.
Here's a bit more info: www.rehablist.org
I think I brought this up cause it reminds me of what could happen to Australia if our governments (us) are not smart enough.
IMO we should tax the crap out of the miners, while they can afford it - but agree with others that it's too difficult to trust this government to put any of the income from it towards any useful investments - that's the conundrum.
didnt Naru build Naru house in Melbourne with thier funds from seagull poo? up near top end town about 15 levels or so.
(we both must be wrong then 
)
Fear and negativity are a pretty effective way to run an advertising campaign, the libs are doing it now also, the mining protest was called the "gucci" revolution, personally I found it offensive that the richest Australians, re Gina, Twiggy etc influenced policy cause they had 20 mil up their sleeves for advertising. If the Government was smart they would have started a campaign depicting the notion "its Un Australian not to pay tax" Not sure what the Government spent but it may have been alot less than Coles spent on advertising [6 mil] on the $2 a litre milk campaign.
It all seems a little short sighted to me, trouble is the consensus of thought is " what's in it for me" sorry, not being holier- than -thou, but we should be thinking, what's in it for the country.
There was a campaign during the second world war I read somewhere suggested that all the good English girls should be doin' there bit for the servicemen and for the old dart, lay down and think of England, we shouldn't necessarily lay down, but we should be thinking about the country before where f***ed
OK I will bite..
If I went to China to start manufacturing DEF or XYZ, I would have to take on a local partner and % of ownership profits etc etc (and in the process forfeit all my IP).
Basically you want in China, it is under their terms.
You want in Australia - U have $ U dictate the terms[}:)] So what is wrong with our system having the balls to stand up for local input too.
An example... You want to mine / or invest here in zero to low IP, zero to low value-add activities, then all the infra-structure product must be sourced locally unless it can be proven it is not possible due to local inability to provide the product. So need steel - buy from local mill. Need car buy from locally made product -investment to include value adding infra-structure locally where practical - etc etc. Foreign ownership maximums - Way way more socialist than I naturally am, but bleeding this country by 1000 cuts requires a Blunt but effective response.
Do I give a drop kick if a foreign owned company has to pay carbon tax - not at all - help us to improve our own abilities to handle the stuff - bring it on - double the rate for special cases (coal mining).
Establishing a good level of mining Tax not a chance - With an average of 80% ownership of mining stock O/Seas and massive cash profits at stake, combined with local political wonder kids with the only aim being to get into power at all costs then moral fibre for the longer term future is not part of the agenda.
If Rudd had tried the mining tax in his first 3 months of office with the majority they had, probably could have pulled it off but not now.
We have effectively modeled our mining rights on 3rd world standards. The modern equivalent of a colonial power is a cashed up corporation who can rely on the laws of the land they operate in to remove the need to invade and set up a colony = Australia.
To me the massive mining operations are logistics - period not complex either. Compare mining to say running Australia post which is logistically complex. There is no IP (it is all tried and tested), there is some value add (but only through necessity) i.e LPG, Iron, gold, - ore extraction, but coal it is just dig and truck.
We provide an educated, stable healthy work force, stable effective living standards, good resource supply lines, good infra-structure, stable government, bend over plastic mining laws, a third estate up for a bias slant, and low taxation on a bang for buck basis. Compare that to a third world country, it is favourable (except bribery is likely cheaper).
The results for Australia are a growing divide between the primary wealth generating industries / businesses and those associated with mining. In a big economy the % of one industry on GDP are relatively low. In the Australian economy, the impact of mining in all its forms is fairly large. This has distorted the economic model we rely on and is damaging a lot of non-mining industries through, labour cost, strength of the dollar, etc.
Subtract mining in all its forms from our GDP and where would Australia be in the OECD tables, not in the bottom division like Greece but likely in the next division up.
So use the advantage the mining offers us to add value to our brand and not de-value it - certainly not add it to the current account and dribble it all away. That is a topic for another thread..
Why did I bite? Late night drudge computing 
- Formatting HDD's for a Server B4 zzz's , tomorrow we have a power outage for most the day.
AP
how long will extraction of aussie ore and minerals last.....20- years only
what then, only hole in ground, what then mining jobs?
we sell CHEAP to whoever, we buy back at around $1200. per ton
crazy,,,,crazy....Crazy!!!!!
