Sunday, August 26, 2007
There's Money in them thar Hills (and Holes)
Australian Government Surplus $17 Billion (Give or Take)
BHP Billiton Australian Global Miner Global Profit $17 Billion (Give or Take)
I have been to the mine in the picture in the Kimberley in Western Australia. BHP have been digging iron ore for years. The scale is astonishing. Don't let anyone say mining is an easy business, but if you have the facility operating and if demand and prices go through the roof, you will be very profitable.
Here in South Australia, BHP are developing a huge mine at Roxby Downs. They are currently doing underground mining, but the mine will be developed as open cut in the next few years. That means at least four years of digging before they get to anything valuable. They also have to build all the infrastructure, including a brand new desalination plant, power plant, import trucks and excavators that have to be built on site, build infrastructure. It is not a game for small players. One of the sister companies to the one I work for does environmental planning for these developments. The picture of the trucks laid out ready for assembly were amazing. Everything has to be trucked in.
As for the Australian Government, seems to me that they just sit back and bank the royalty cheques. It is good for the economy that China is expanding so rapidly, but surely some of this money could be returned to the over taxed and over charged Australian Taxpayer and to make some sorely needed investments in infrastructure such as telecommunications, roads, public transport, hospitals, schools......