Newsletter: 2012, December
Welcome to RSC’s December Newsletter!
We seem to be going form one alarming headline to another in recent months with no end in sight. Who hasn’t heard of the fiscal cliff, the Greek or Spanish crises, European crises, China slowdown, Australian misogamists and high costs of mining. Meanwhile, nationalisation laws hit one country after another and places where you thought they had things sorted suddenly get overrun by extremists (ie Mali).
For those linking all this stuff to work and their job security in the mineral exploration or mining industry it may be hard to see where this is all going and what effect it has. Surely in the long run, our jobs as rock doctors must be safe as we will always need the raw materials that we pull out of the ground?
It seems that we’re all reasonably clear on the long term outlook. That is, there are a number of people that seem to think global demand and other basics are fundamentally strong and will guarantee some sort of protection. The good folks at Rio seem to think that until 2030 “all is well” in the iron ore world in general terms.
Noise from the financial analysts is clearly that China is picking up reasonably well (in contrast to the rest of the world) and had some really good months recently. That will be good for the iron ore situation surely. But there are analysts that say Australian mining stocks are still strong whilst others rather put their money elsewhere.
If you listen to the gold people, most folk seem to think that gold will do very bullish things, driven by this seemingly unavoidable fiscal disaster that simply just gets kicked further down the street. It is alarming though that gold has dropped with the recent fiscal cliff news, where people would otherwise turn to for a safe haven.
We’ve recently been following a group of gold evangelists who say a major event is nigh and that the global manipulation of the gold price is bringing things to a halt pretty quickly. All they really need is to get out on the street and chant “bring out your dead!”.
Then there are the REE’s which are a bit of a burst bubble and even though uranium seems to be experiencing a bit of a blip, who knows what the long term outlook is.
It’s either one or the other: low prices are putting expansions and new projects off, but it’s really a good in terms of maintaining a healthy supply-demand chain. You sort of lose track of what is good or bad sometimes. Well, I do, that’s for sure.
But whether long term outlooks are good or bad, that’s perhaps a bit too far away in the future for some and I don’t know about you but I’ve got bills to pay right now. Judging from the many CV’s that keep flooding in, people want work and there isn’t as much going around as a year ago that’s for sure.
We at RSC do a fair bit of work in Australia. But boy have things suddenly taken a turn! First the iron ore and coal prices took a dive, and now we’re dealing with a strong dollar (making exports more expensive) plus sky-high production and operating costs and that means that people simply still continue to delay putting more staff on.
More and more questions are being raised with regards to the global competitiveness of Australia. Apparently it is u to 66% more costly to set up a coal project in Oz than anywhere else in the world. Now that Australia has just cut 10,000 jobs in the resource industry, is scaling back on current exploration and putting off future projects, is that creating a sustainable platform for competitive growth? Not to mention that bloody mining tax!
The big boys seem to still be well placed but it’s still a hard sell for juniors trying to raise capital for new projects at the moment. There aren’t many people that like to put money into companies that have no cash and a project that desperately needs it.
We were at the 2012 Brisbane Mining Conference last month where in general sentiment seemed to be “on the up” and it appeared that some money was changing hands but there aren’t many success stories. Sorry folks, I think Oz is losing its shine pretty darn quickly at the moment and short term I think it’s still not looking that flash.
When it comes to the next six months, we still think things will be on the up come March-April but we wont return to where we were a year ago. I may say it a bit more carefully now but I think the reactions in most places in the last few months have been a bit over the top and now that the dust is settling, some life is definitely returning to at least the contract employment part of the industry. Expenditure commitments need to be met for the explorers, resources need to be defined and new projects evaluated.
What to tell the many job seekers who are on our mailing lists? Use the time to upskill yourself, don’t sit still but read and investigate. Tag on that MSc or PhD. There are still plenty of good companies and projects about. Be willing to make some sacrifices. If you’ve got some funds at your disposal, travel to where the work is, get in front of people, and, do your homework.
Maybe we should all just throw a hard hat on, grow a goaty, plunge in those Alaskan rivers and join those guys that make such good TV shows on Discovery Channel “mining” gold in Alaska or the Bering Sea. Heck, it looks fun to me!
What have we been up to in the last few weeks?
You could argue that given the issues mentioned above and the pinch on exploration programmes, we would have plenty of time to write newsletters. Not so much. Rene has been running around the globe getting new projects in Mali and Sweden started and, in between, doing some consulting in Ghana.
Sean has been busy evaluating client’s gold projects in Zimbabwe, Ron has been working hard on a project in Queensland that has only just finished and Craig has been flat out on a management level with client work requests from a variety of new angles. The rest of the admin team is busy wrestling with the usual timesheets and visas (well done Nik, Helen and Hannah) and the geologists, well, they are all out doing what they do best: playing with rocks.
We’ve got one of our best teams currently in Sweden and boy are they a bunch of great guys and good geos, we sure are blessed with the folk working for us. It’s great to see the passion with which they are approaching the job and the geology discussions have been great, also driven by the exceptional geologists our client employs.
For me personally, it was quite an experience to fly from 35 degree Ghana to the northern extremities of Sweden where the temperatures were close to 30 degrees below zero! It turns out that the clothing that we are used to in Australia and NZ really doesn’t cover it. I am glad I brought 9 pairs of thermals.
We’ve got some good things in the pipeline for the new year, but the December/January months are always quiet and we’ll see everyone again when people come out of hibernation in January.
RSC Dunedin (NZ) shake-up!
But, before we say goodbye for the rest of the year, remember the last (and first) social session in our nexus of the universe, Dunedin? The next get-together will be on the 18th of December. This time it will be at a different venue as the last one was way too small. Given the higher than anticipated turnout, we will now meet for drinks and banter in the Speights Ale House. Maybe drinks are on Oceana this round as the news from the Didipio project in the Philippines seems to be quite positive, well done guys, congrats, I’ll have a Emerson’s Pale please thanks!
So what does RSC do?
RSC provides geological contracting services with a difference: we don’t just send out geologists to help with a programme; we make sure our professionals have excellent support and come with all the tools, hardware and software necessary to hit the ground running.
We do more than just fill a gap in your busy exploration and mining programmes; we add genuine value, whether it is logging core on an underground rig, logging RC chips on a surface rig, or looking after an exploration programme from A to Z.
We understand of course that we are not the only ones offering these kind of services but RSC feels strongly that its clients shouldn’t have to pay for a contractor, pay higher than normal rates and at the same time have to educate and kit them up as well, something that we hear only too often!
We look after our clients as well as our geologists, charge very affordable rates and invest in the training of our geologists to make sure they add value from day one. We operate worldwide and work for junior explorers as well as for bigger companies such as Barrick.
We would value the opportunity to follow up to discuss our services in greater detail and how we could cater for and be of benefit to your team and project goals.