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Drilling into Palmer’s myths

Yesterday’s debate at the National Press Club between Paul Howes and Clive Palmer over the RSPT wasn’t exactly a sell-out. Moreover, there was a curious absence of the many, many mining executives in town for ‘Minerals Week’, whom one would have thought would have been keen to support the most vociferous opponent of the RSPT.

I asked Palmer about the difference between the rhetoric of the miners and their supporters and what the industry is continuing to do on the ground. I noted that Australian-listed miners had outperformed the S&P/ASX 200 over the last month, had substantially outperformed overseas stock markets in the same period, and had seriously outperformed foreign miners.

Brazil’s Vale, for instance, supposedly poised to take advantage of our fiscal foolishness, lost 10.5% of its value in its New York listing in May. Anglo-American lost 13% on the NASDAQ. Freeport-McMoran lost 10%. Our miners only lost 6%.

Ah, replied Professor Palmer, that was because everyone knew the RSPT would never be implemented. Moreover, investment analysts were telling big investors exactly that. He named Credit Suisse.

It was the Peter Dutton defence, used by the member for Dickson to justify why he embarrassed his leader by buying BHP shares after the RSPT announcement, despite his party’s line that it was a disaster for the mining sector.

Unfortunately, the good professor’s claims are at odds with the views of a wide variety of commentators.

The chairman of Swiss outfit Xstrata, Mick Davis, chipped the Financial Times after it editorialised in favour of the tax.  “Australia’s reputation as a stable regime for foreign investment has already been damaged and investments in Australian resources are at risk of being delayed or cancelled,” Davis said. By the way, Xstrata is listed in London and derives less than 40% of its earnings from Australia, but its stock has tanked 10% in the last month, much more than local miners.

Clive’s statement was also at odds with the views of Citigroup, which complained “at the very least, the uncertainty over implementation could delay projects by 12 months.” Then again, Citigroup recommended local mining stocks as a BUY after the tax was announced, so who knows what the hell they think?

Andrew Forrest also seems to have a different view. “The uncertainty in the financial markets caused by the proposed tax” was blamed by Forrest on his decision to review FMG’s projects.

Then there’s reactionary economist ‘Henry Thornton’ who declared “Australia now is widely perceived as a high ‘sovereign risk’ place to do business” and there needs to be a law against politicians lying (a rich statement indeed in this debate).

For that matter, there’s Palmer himself, who was reported as saying when visiting Mackay two weeks ago that “with the threat of the RSPT on Mackay’s mining industry, many future developments could be put on hold”/

Then there are our colleagues at Business Spectator who have been calling for a capital strike in response to the RSPT.

Contrary to Palmer’s claim that everyone knows the tax will never be implemented so everything is sweet, the miners and their cheerleaders have been consistent in their claim that the RSPT proposal is already damaging their industry and for that matter Australia’s entire reputation.

Yet they’re outperforming the stockmarket and their foreign mining competitors.

And they’re outperforming them for a reason: they know the RSPT won’t have anything like the impact they claim.

That’s why development is going full throttle in the Pilbara.

That’s why some of the biggest names in the resources sector, including BHP and Xstrata, are happily paying over the odds to buy QR’s coal lines.

That’s why Perth mining magnate Tony Sage (who’s more of a miner than Clive will ever be) declared the tax was a killer but then bought a million shares in his own company when the price dipped.

Professor Palmer’s explanation for why the miners are doing so well at the moment is about as plausible as the analysis of Das Kapital he was offering yesterday.

Oh and there’s one other firm at odds with Palmer. I contacted Credit Suisse to find out if their analysts had been telling investors that the RSPT could be ignored as it would never pass through federal parliament, as Palmer claimed. They could only point to a research note produced on May 10 that discussed the tax.

It noted the opposition opposed the tax, and that it would need the support of an independent senator to block an RSPT bill, assuming the bill would be introduced before the 2010-elected Senate sits next year. Credit Suisse’s conclusion? “Will it get through the Senate? This is a difficult question to answer, but if we can draw one insight from the ETS experience, the bill that is put to the Senate is likely to look significantly different to this ‘first draft’.”

That’s not quite what Palmer said.  Perhaps he didn’t read Credit Suisse’s actual advice. It goes on to say:

We have modelled a theoretical new iron ore project under the existing and proposed tax regimes. Using US$100/t installed capacity for capex and US$30/t of opex, our modelling suggests the economics are the same under both tax scenarios at a LT iron ore price of US$60/t. At prices below US$60/t, the new tax regime is actually more favourable and at prices up to US$70/t the impact on IRR in % change terms is less than 10%. Given the level of uncertainty around operating costs, capex, demand etc. we think it is safe to say that at a LT iron ore price of between US$55/t and US$70/t an investment decision is unlikely to be materially impacted by the RSPT.”

No wonder the miners stayed away from Clive yesterday.

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  • 1
    Bill
    Posted Thursday, 3 June 2010 at 1:35 pm | Permalink

    We might have a better debate if Clive stayed away - and Kevin stayed out of it as well…

  • 2
    shepherdmarilyn
    Posted Thursday, 3 June 2010 at 1:51 pm | Permalink

    Why have a debate, just tax them like we have to pay tax. No-one else gets to “negotiate” their tax rates.

  • 3
    John
    Posted Thursday, 3 June 2010 at 1:53 pm | Permalink

    Bernard,
    You are more in favour of this tax than Ken Henry, and he is supposedly its father.
    At least wombat-man realises this tax is not his child.
    The mother of this tax is Wayne Swan.
    It is a bastardised version of Henry’s tax.

  • 4
    zut alors
    Posted Thursday, 3 June 2010 at 1:55 pm | Permalink

    Henry Thornton’s’ comment that there should be a law against politicians lying has me in stitches. Who would legislate this law - politicians?!

  • 5
    mattholden
    Posted Thursday, 3 June 2010 at 1:55 pm | Permalink

    The message the government needs to sell seems simple enough to me: tax the value of minerals, not the volume … how hard to understand is that?

  • 6
    David
    Posted Thursday, 3 June 2010 at 1:57 pm | Permalink

    Informative stuff BK, perhaps the likes of the scaremongering JamesK on a previous blog would absorb the figures and reflect.

  • 7
    shepherdmarilyn
    Posted Thursday, 3 June 2010 at 2:06 pm | Permalink

    The fact that exports went down and government spending is the only thing that stopped a massive backward economic step should have shut the whiners up, they contribute 6% to the nations GDP.

    Hands up all those people who would be destitute if we lost $6?

  • 8
    JamesK
    Posted Thursday, 3 June 2010 at 2:07 pm | Permalink

    Yes Bernard…we know…. ‘big cat miner’ Clive Palmer who you detest.

    Don’t for heaven’s sakes gives us an informed article on your beloved, his woeful superficial politics and capriciousness and don’t under any circumstances gives the punters an insight into the pros and cons of a rent tax and contrast that with krudd’s RSPT.

    [Moderator- this comment has been edited. Please no personal jibes against other commenters and article authors]

  • 9
    JJ Fiasson
    Posted Thursday, 3 June 2010 at 2:14 pm | Permalink

    A brilliant piece as usual. Clive Palmer does the mining industry no favours with his hyperbolic rhetoric day after day. I wonder if the industry will start to wise up and put him on a short leash. I’m now laughing at that mental image. Oh god.

    Anyway, the collective effort of The Daily Bludge & OzForums team has gone into building a mining tax facts site at http://www.miningtaxfacts.com.au All statements there are fully referenced with credible media sources. Hopefully this can serve as a good resource to anyone who wants to espouse the merits of the tax to anyone that will listen.

  • 10
    shepherdmarilyn
    Posted Thursday, 3 June 2010 at 2:22 pm | Permalink

    Actually Clive has never actually mined anything.

  • 11
    Martin Fewings
    Posted Thursday, 3 June 2010 at 2:28 pm | Permalink

    Brazil’s Vale, for instance, supposedly poised to take advantage of our fiscal foolishness, lost 10.5% of its value in its New York listing in May. Anglo-American lost 13% on the NASDAQ. Freeport-McMoran lost 10%. Our miners only lost 6%.”

    Bernard, your hysterical, predicatable and evidence-free attack on the miners has become stale. I know that you are aware of currency fluctuations, as I recall the incredible lapses in logic, non sequiturs and circular reasoning that distinguished your recent exchange rate arguments ( where you attempted to argue that the radical decline in the Australian dollar was not related to the RSPT ).

    Now, however you forget about exchange rates and claim that the 6% decline in $A share prices of local miners is further evidence of … whatever you are trying to argue. But certainly you must realise that comparing the decline in value of Australian miners in Australian dollars and other miners in $US is apples and oranges.

    Try some evidence, it helps. With 2 seconds thought I came up 4 Australian miners whose share prices (ADRs) are quoted in $US. Since the trading day before the RSPT announcement , BHP is down 16%, Newcrest is down 12.5%, Fortescue is down 23.8% and Oz Minerals is down 29.3%.

    Between you and Wayne Swan, you are doing your best to make Clive Palmer look reasonable.

  • 12
    godotcab
    Posted Thursday, 3 June 2010 at 2:28 pm | Permalink

    Would it be such a disaster if mining activity slowed down a bit, for a while?

    It might be better for our future economy if more of those clever engineers were available to design a green re-tooling of manufacturing, construction, transport and other industries. Currently, smart, mobile, highly skilled workers are drawn to mining by more money than other sectors can offer.

    And is it so terrible if some identified resources were left for another generation, in another economic cycle?

    Besides, this new tax policy won’t slow prospecting and development of resources anyway. It’s actually a break for those mining enterprises that are more ‘hard scrabble’ in nature. Miners who don’t make super profits do better out of this deal.

  • 13
    davidk
    Posted Thursday, 3 June 2010 at 2:34 pm | Permalink

    Thanks JJ. The site seems unambiguous and unpolluted by vested interest, which is unusual in this debate. The likelihood of any of the protagonists who support the tax listening to the facts is slim. This campaign is more about attacking the Labor government than anything else, which is why it suits the opposition so well.

  • 14
    Holden Back
    Posted Thursday, 3 June 2010 at 2:40 pm | Permalink

    Can anyone explain why middle-aged tycoons dye their own hair, badly?

  • 15
    Rush Limbugh
    Posted Thursday, 3 June 2010 at 2:40 pm | Permalink

    AS a side note..

    http://www.news.com.au/world/climate-change-increases-island-size-scientists-say/story-e6frfkyi-1225874903902

    Climate change ‘increases island size’

    A NUMBER of Pacific islands previously thought to be losing ground to rising sea levels caused by climate change have actually grown larger, according to scientists.

    A study published in this week’s New Scientist magazine has revealed that despite long-held fears that islands in the Pacific Ocean would be washed away in coming decades due to rising sea levels from global warming, the islands are actually responding to the threat by growing larger.

    The study of 27 islands by the University of Auckland and the South Pacific Applied Geoscience Commission in Fiji found that over the last 60 years only four of the islands had shrunk, with the others either remaining stable or growing.

    ..In the same period sea levels have risen by 120 millimetres, or 2 millimetres a year.

    The reason lies in the how the islands were formed over time, the study said, as weather patterns change the islands appeared to respond.

    Erosion of coral forms the foundation of Pacific islands and, as living coral provides a continuous supply of material, wind and wave action helps a constant build-up of debris to form on the islands.

    Major weather events like cyclones serve to further add to the islands foundations. When Hurricane Bebe swept past Tuvalu in 1972 debris washed up on the island caused a 10 per cent increase in the main islands size.

    Tuvalu is one of the first island groupings predicted to sink under rising sea levels caused by climate change with altitude of just 4.5 metres.

    However the study revealed that seven of its islands have grown by an average of 3 per cent since 1950.

    Similar findings were made in nearby Kiribati where three of the larger populated islands grew by between 10 and 30 per cent.

    However, the studywarned that rising sea levels would still be a threat in many parts of the world, and that factors such as erosion could not be discounted as threats to the islands.

    hahahahahahahahahahahahahahahahahahahahahahahahahaha

  • 16
    Michael R James
    Posted Thursday, 3 June 2010 at 2:47 pm | Permalink

    Speaking of Vale: from business pages of The Australian Monday:

    The expected increase will push prices for Vale’s iron ore fines, a basic product used in steelmaking, to about $US145 a tonne from $US110 in the second quarter, when prices doubled from 2009 levels.”

    So yes another 35% increase in spot prices of iron ore, on top of 100% increase over the previous year. (It is because of increased activity at the Chinese steel mills.) Of course royalties do not recover one extra cent of this windfall profit the miners make from selling our resources.

  • 17
    JBG
    Posted Thursday, 3 June 2010 at 3:08 pm | Permalink

    Won’t be much left to tax soon. Good work Kev:

    Global miner Xstrata has suspended almost $1.2 billion in coal and copper mining projects in Australia, blaming Canberra’s new mining tax.

    Xstrata, which last month halted some copper exploration in the country’s north, said it was now suspending $586 million of spending on its Wandoan thermal coal project and also a $600 million project to expand its Ernest Henry copper mine.

  • 18
    Holden Back
    Posted Thursday, 3 June 2010 at 3:09 pm | Permalink

    @ RL. Thanks for the report from Nature. What a piece of good luck that rising ocean levels are increasing the island size. Less likely we’ll have to deal with refugees from Tuvalu.

  • 19
    Posted Thursday, 3 June 2010 at 3:09 pm | Permalink

    Rush you’re back! Just in time to post your picture, you adonis you!

  • 20
    David
    Posted Thursday, 3 June 2010 at 3:10 pm | Permalink

    @ JBG for goodness sake read all the comments here before shooting forth.

  • 21
    GC51
    Posted Thursday, 3 June 2010 at 3:11 pm | Permalink

    Dear Rush,
    This article is about Clive Palmer not climate change.
    You’re on the wrong page old son.
    Back to the Bernardi article.

  • 22
    zut alors
    Posted Thursday, 3 June 2010 at 3:14 pm | Permalink

    I’m confused - which blog does Rush Limbugh think he’s on? Or, more interestingly, WHAT is he on…

  • 23
    davidk
    Posted Thursday, 3 June 2010 at 3:19 pm | Permalink

    @JBG All the more reason to tax it while it lasts. Do you really believe what the miners say?

  • 24
    kevrenor
    Posted Thursday, 3 June 2010 at 3:20 pm | Permalink

    If the Mining COMPANIES won’t pay up to the people of Australia and go on strike, let their leases expire and leave it in the ground for my children and their children.

  • 25
    Scott
    Posted Thursday, 3 June 2010 at 3:22 pm | Permalink

    The KPMG report to the minerals council is a good example of why both parties are able to claim their argument (that the tax will be both a positive thing and a detrimental thing to the mining industry) is correct. Modelling is only as good as the assumptions behind it, and there is a bit difference between Macroeconomic modelling and Financial modelling.
    If you look at the rent tax from a long run, theoretical, whole of economy perspective (as Treasury has), it is a good thing. However in the short to medium run, industry specific, practical world of finance perspective (Minerals Council), it is a horror and will do a lot of damage. International investors aren’t in Australian mining because they like Australian rocks. They like money. Taxation is a disincentive for business and if the new tax it makes the investors rate of return less than mining projects in other countries (like Canada), they will quite happily move their money elsewhere. Australia is dependent on foreign capital to fund it’s projects (we don’t have enough savings to fund our own) so if the money moves, it means less new projects, less new investment in Australian mines. It’s not scare mongering, just a simple statement of fact.
    If you want to read the report, it is here http://www.minerals.org.au/__data/assets/pdf_file/MCA_News/RSPT%20Report%20FINAL.pdf
    A bit dry for the non-finance guys, but worth a look if you are interested in why the miners aren’t happy. (list of the assumptions is on p33 of the report)

  • 26
    David
    Posted Thursday, 3 June 2010 at 3:22 pm | Permalink

    Poor old Rush, out of step as always, keep up lad keep up.

  • 27
    GC51
    Posted Thursday, 3 June 2010 at 3:28 pm | Permalink

    @Holden Back,
    It’s Tony’s sneaky plan is to have the “illegals” processed there.
    I know, he told me.
    Wait a minute, what the……..!!!

  • 28
    davidk
    Posted Thursday, 3 June 2010 at 3:55 pm | Permalink

    Rush is a single issue party.
    @ Scott. We do have quite a few $ in Super. The miners will go where the minerals are. I think it’s about time we stopped dancing to the tune of the multinational Investment Banks. Taxation is our only weapon in this game.

  • 29
    Rush Limbugh
    Posted Thursday, 3 June 2010 at 3:56 pm | Permalink

    I figure since Bernard can’t keep to the news of the day, neither will I.

    Dan, how do I post pics? And I will gladly do so.

  • 30
    Julius
    Posted Thursday, 3 June 2010 at 4:00 pm | Permalink

    I’m not much interested in reading about Clive Palmer or his views but picked up one of those touches that you so often use, BK, to tell us more about yourself than about others or any other subject. “Henry Thornton” is a “reactionary” economist you say. Interesting that he is a close friend of Ross Garnaut who helped invent the workable resource rent tax that we already have for the offshore oil industry. But it is that old-fashioned word “reactionary” that says so much - or were you satirising yourself? (BTW HT is so reactionary that he is still, on balance, a Keynesian…..).

    Has it occurred to you that there is quite a moral issue that confronts not only the Rudd government trying to find a way at others’ expense to have themselves re-elected but also to those of us, voters, who are being invited to have them steal for us and are going to be invited to sanctimoniously say that what the majority wants, even when taking other people’s property, is morally right to give effect to.

    Remember: the resources which are already being mined are only “ours” in the sense that a house we might have leased to someone for 50 years is still “ours”. If there is a right to change the royalty rules according to some formula or understood principles, e.g. when the price of the commodity changed, that would be one thing. But, in the case of the RSPT it is hard to distinguish what is being done from any tax change which altered the company tax rate for a particular industry or group of companies within it. What about “you Japanese bought all these shopping centres and commercial buildings when the AUD/Yen rate was ridiculously low so you are now making super profits. We will therefore raise the standard corporate tax rate on foreign owned property businesses to 35 per cent”?

    The government is perfectly entitled to do it constitutionally, just as it is perfectly entitled to levy a 30 per cent tax on all individual net worth over $2 million and spend it all in marginal seats needed to maintain its majority.

    The RSPT is contemptibly immoral as proposed and you should be able to see that. It is not as though it is wartime and Australia has run out of credit for buying armaments so needs to grab money where it can. BTW my family’s superannuation will benefit from the transfers from the RSPT according to Swan. Like Fagin, I do prefer to have others do my stealing for me.

  • 31
    Darko
    Posted Thursday, 3 June 2010 at 4:13 pm | Permalink

    @Martin

    I am a currency trader myself and the decline in the Aussie dollars is due to the slow recovery of the global economy especially with problem in Europe which make speculators avoid risks currencies; and in the Aussie dollar case it is also a proxy for commodities and weak global recovery and the simultaneous drop in mining shares globally cause investors to turn elsewhere. Although there has been concerns about the RSPT in forex circle it was more about the uncertainty which all the hysteria and the fighting between the two camps have caused.

  • 32
    JamesK
    Posted Thursday, 3 June 2010 at 4:27 pm | Permalink

    http://www.theaustralian.com.au/business/future-projects-in-jeopardy/story-e6frg8zx-1225874736702

    http://www.reuters.com/article/idUSSYU01003120100603

    Taxation is our only weapon in this game” says peerless wealth redistributionist DavidK no doubt akin to the inadvertent disclosure of Kerry Brien’s election night “swing to the ABC” lefty credo

    Well peerless is not quite right.

    There’s Hugo Chavez and Vladimir Putin but I don’t really think the people’s wellbeing figure strongly in their calculations…..

  • 33
    Socratease
    Posted Thursday, 3 June 2010 at 4:28 pm | Permalink

    Tom Uren once described Senator Robert Ray as “a garbage bag, physically and mentally”.

    I think of that quote every time I see Clive Palmer.

  • 34
    davidk
    Posted Thursday, 3 June 2010 at 4:59 pm | Permalink

    @ Darko Yes I saw some mining stocks I own plummet yesterday and recover somewhat today. The only cause I could think of was Clive’s speech.

  • 35
    Holden Back
    Posted Thursday, 3 June 2010 at 5:23 pm | Permalink

    Oh, DAVIDK you know full well it was just the Invisible Hand!

  • 36
    bakerboy
    Posted Thursday, 3 June 2010 at 5:45 pm | Permalink

    As Kevvie said yesterday - the shrill bleatings of the miners is just bunkum. Mining in Australia is easy pickings - good infrastructure, good climate, unlike freezing cold Canada, stable goverment, unlike Africa or Sth America.
    Palmer is a goose. As Marilyn said, he has never mined a kilogram of product. He is a speculator who holds mining leases and will sell out to the highest bidder. This is the bloke who recently refused to pay the $2 train ticket subsidy to Qld Rail for his soccer team’s fans to get to a game. Apparently he wanted to reduce the size of the crowd attending - Doh!

  • 37
    Liz45
    Posted Thursday, 3 June 2010 at 5:58 pm | Permalink

    #
    shepherdmarilyn
    Posted Thursday, 3 June 2010 at 2:22 pm | Permalink

    Actually Clive has never actually mined anything.”

    Yeah! Good for you Marilyn! I’m sick of the mis-use of the word “miners”? By the look of Clive, he’s never done a days work in his life, let alone be a “miner”? Never seen a fat bloke who worked down in a mine? Never! Look through all the archives etc! They usually ended up looking pretty old, skinny and sick!

    Now all the workers will have their turn won’t they? Go to Canberra and discuss their tax levels? Sounds good to me. Why do these morons get all the advantages? One of these greedy bastards reckoned that the mining industry ‘didn’t make any money last year’ and then we find out, that they made a miserly $3.8 BILLION! Tragic isn’t it?

    So we won’t ask them to write the legislation that will make lying a criminal offence, will we?

    Tonight we’ll have all the greedy bosses whining about the $26+cents weekly wage increase for the LOWEST paid! Damned cheek!

  • 38
    Posted Thursday, 3 June 2010 at 6:02 pm | Permalink

    Dan, how do I post pics? And I will gladly do so.

    Use one of the many free image hosting sites. imgur.com is a good one.

  • 39
    Ron E. Joggles
    Posted Thursday, 3 June 2010 at 6:29 pm | Permalink

    Clive Palmer revealed his true character when he laughed that he was unable to pay for meals at restaurants because the restauranteurs “wouldn’t let” him pay, because they hoped that his patronage would be great for their popularity.
    If he had a decent bone in that bloated body he would insist on paying, and generously too!
    Like most of the greedy rich, Clive mistakes wealth and power for intellectual and ethical superiority.

  • 40
    Liz45
    Posted Thursday, 3 June 2010 at 6:42 pm | Permalink

    JAMESK - “There’s Hugo Chavez and Vladimir Putin but I don’t really think the people’s wellbeing figure strongly in their calculations”

    Well, I’m no fan of Putin, but once again your political ignorance is showing! Since Hugo Chavez was elected(has been, many times and increased his margins each time - no talk of illegality according to those who witnessed them, including Jimmy Carter?) the people have benefited greatly. It was only a relatively short time, that numeracy and literacy skills were at UN standard; education possibilities for the poor increased greatly, and people saw a doctor when they never had before - including pregnant women. The people have re-written their Constitution in a very involved and public manner - small meetings etc, and their new Constitution which includes the indigenous people(unlike their prior and ours?) and minorities - which ours doesn’t! The infant mortality rate has improved, and Cuba is training new doctors at this time - as they have with Haiti and other impoverished countries! Incomes have increased for the poorer people; supermarkets with cheaper costs for low income people etc.

    You obviously supported the pro-US minority non-indigenous people who allowed the peoples’ resources, including their labour to be exploited! Now why doesn’t that surprise me? You support the oppression and enforced poverty of the wealthy above the needy and neglected!

  • 41
    shepherdmarilyn
    Posted Thursday, 3 June 2010 at 6:47 pm | Permalink

    Does Clive really think anyone is going to stop digging up gold when it is worth 1200 per ounce?

  • 42
    Ron E. Joggles
    Posted Thursday, 3 June 2010 at 7:08 pm | Permalink

    Daniel, mate! This is off-topic obviously - I have the same question as Rush - uploaded the photo to Imgur.com - so this comment is just to see if it works. If so, thanks.

  • 43
    Ron E. Joggles
    Posted Thursday, 3 June 2010 at 7:10 pm | Permalink

    Nuh! Maybe I’m being a bit obtuse - any suggestions?

  • 44
    JudyS
    Posted Thursday, 3 June 2010 at 8:39 pm | Permalink

    What a doolalley Palmer is.

    A disgustingly rich doolalley with no conscience, and no sense of responsibility to his country.

    What about this:
    “Do you really believe,” Clive Palmer asked the Press Club, “that in the late 1800s Paddy Hannan would have walked 600 miles in the hot sun from Perth to Kalgoorlie to discover gold if he had to pay the Wayne Swan resource super tax?”

    Well, the answer to that is yes, yes, and yes again!
    Paddy obviously walked all that way in the hot sun with no guarantee of anything whatsoever!
    Paddy was a simple prospector.
    Paddy obviously had no idea that obscene riches beyond the dreams of Croesus (like those of Palmer) would accrue to others (certainly not him) from his discovery.
    And Paddy ended up a humble man on a modest government pension.

    Paddy and his family would surely have been more than happy to have been in a position to have to pay the resource super profits tax!! That is, the tax on super profits which uber-rich persons like Palmer have made from the Australian resources discovered by humble prospectors like Paddy Hannam.

  • 45
    Bernard Keane
    Posted Thursday, 3 June 2010 at 8:52 pm | Permalink

    Dear Fewings

    The falls I quoted were in locally listed currencies. Nothing to do with forex fluctuations, you nong.

  • 46
    Socratease
    Posted Thursday, 3 June 2010 at 8:53 pm | Permalink

    @Ron E Joggles: You need to post a link (URL) to the picture once it is stored on a hosting server. In that sense, it’s the same as posting a link to an article.

    However, be aware that Crikey posts which contain URLs are automatically suspended while they await moderation, and the moderators seem to work standard business hours.

  • 47
    Julius
    Posted Thursday, 3 June 2010 at 8:57 pm | Permalink

    @SHEPHERDMARILYN

    Clive Palmer is no doubt an uninteresting (though fascinating to Bernard’s blog groupies it seems) embarrassment to real mining industry explorers and producers but your 6.47pm post is an embarrassment to clear thinkers, assuming you claim to be one as a justification to contributing to public discussion. You say

    Does Clive really think anyone is going to stop digging up gold when it is worth 1200 per ounce?”

    Quite literally, until some new development expenditure is needed, mining gold from an established mine for which the variable costs per ounce are low enough to make 1200 an ounce profitable is not likely to be discontinued, but……

    It is a ridiculous thing to say without reference to exchange rates (and the RSPT is likely to be bad for the $AUS so good for Australian gold miners), to costs of extraction and the fact that the gold, including extensions to existing ore bodies, has to be found by expensive scientific prospecting. Then, when you take such factors into account you have to forecast profitability after tax from the prospective development and “digging up” (and selling) and compare that with the required return on investment, or on equity, which determines whether a project gets to go-ahead when all alternative uses for the money to be invested are considered. If a large rich, easily accessible, ore body yielding gold was estimated to be able to earn 15 per cent return on equity at current gold prices and the RSPT would reduce that after tax return to 12 per cent is it not obvious that future Australian gold production may be less because of the tax change?

  • 48
    Julius
    Posted Thursday, 3 June 2010 at 9:09 pm | Permalink

    @Bernard Keane

    WHO’S THE NONG!!??

    You say

    Dear Fewings

    The falls I quoted were in locally listed currencies. Nothing to do with forex fluctuations, you nong.”

    That was his point. The first three falls you cited were New York, therefore $US share prices. Xstrata presumably in GBP since it is London listed. The fall of the $AUS against the $US (and to a smaller extend from memory against the GBP) means that the falls of the Australian miners were substantially greater than the falls of the others when all measured in a constant currency. And that is what any rational institutional investor, and certainly foreign investors, would be concerned about.

    Caught again by your basic innumeracy?

  • 49
    shepherdmarilyn
    Posted Friday, 4 June 2010 at 1:30 am | Permalink

    Oh for heaven’s sake, no-one is going to stop mining gold although they will try and blackmail the country into believing they will.

    Like Xtrata claim they have halted a mine that does not exist and the stupid OZ believe them.

  • 50
    gef05
    Posted Friday, 4 June 2010 at 2:25 am | Permalink

    Bernard said:
    “Dear Fewings The falls I quoted were in locally listed currencies. Nothing to do with forex fluctuations, you nong.”

    That’s awesome. Way to go to miss the point, Bernard!

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