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Old 03-14-2015, 03:24 PM   #1
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Liberty A SLOWDOWN in China and shrinkage in the consumption of coal are tearing holes in the fabrics of onc

A SLOWDOWN in China and shrinkage in the consumption of coal are tearing holes in the fabrics of once-booming mining towns in Queensland’s Bowen Basin.

At the peak of the coal boom in 2011, the Bowen Basin boasted 48 operational coal mines and more than 50 mining projects.

Driven by rocketing demand from Asia, coal and iron-ore insulated the country from the worst of the GFC, and temporarily turned Australia into the world’s largest exporter of coal. Japan is the biggest buyer, with China in second place buying another 23 per cent. As the world’s largest importer and consumer of coal, China and its promise of perpetual economic growth was the linchpin upon which the Australian coal industry pegged its prosperity.

By 2012, oversupply of the commodity, coupled with Chinese efforts to diminish dependence on the most polluting of all fossil fuels saw coal prices start to head south. Last month, thermal coal fell to $73 per tonne (compared to $166 per tonne in 2011), while the commodity price for a tonne of metallurgic coal fell to $135, from $380.

Coal’s free fall has sent shock waves through the Bowen Basin. Half a dozen mines have been closed, a third of those that remain operational are running at losses and more than 1,200 mining jobs were axed last year alone. And new mine closures and job losses loom heavily on the Central Queensland’s blood-red horizon.
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Old 03-15-2015, 12:54 PM   #2
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China is the Saudi Arabia of coal, yet they buy up everyone else's resources, including coal, to save their own for last. They are doing the same with every other resource they are rolling around the world buying. The spree has been going on quietly for years now. China has developed more trade agreements in the last ten years than the rest of the world combined. These agreements are largely resource related; food, fuel, gold, silver and livestock. Their three and a half billion citizens are now consuming at twice the rate they were in the late eighties. This cannot, and will not, end well.
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Old 03-16-2015, 02:10 PM   #3
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China's slow-down is already having effects in Brazil, the latter is slowing sharply (perhaps for other reasons too).

China saving her resources for "last" is a strategy that I have seen them articulate. I do not know how deeply they practice that, nor how effective that strategy is.

I wait almost everyday for Peru to tell me that THEY are slowing down as well (so far everything is OK in the auto parts sector there). Peru exports a lot to China (copper, iron ore, probably gold). I can mention that Ameru gets approached by other Chinese bearing exporters offering ever-lower prices.
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Old 03-20-2015, 07:45 AM   #4
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I have been reading a lot of scary stories about China lately, and most of them are about the slow, torturous decline of the Chinese economy. This Potemkin façade they hold up so proudly is falling down, and when it hits the ground, the larger world economy will not be able to withstand it.
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Old 03-20-2015, 08:27 AM   #5
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The combination of the strong US dollar versus the Australian dollar and China's slowdown hurting the Australian economy is making for a great opportunity to buy shares of Australian companies. If only companies started paying dividends in gold/silver!
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