Coolamon Mining Report, Autumn, 2009

 

Dear All,

The 2009 year started off well for us, with adequate rainfall, nice green grass, healthy cows and a large mango crop, although the flying foxes ate most of them -- the Qld Government in it's infinite wisdom caved in to the "greenies" as usual and enforced a complete ban on the shooting of flying foxes, just as the fruit picking season got under way.   Some of the commercial growers of lychees, stone fruit and mangoes lost hundreds of thousands of $ worth of crops.   We do not usually sell our mangoes as we are never home long enough to maintain an adequate spraying regime, so Jenny spends all of January peeling and slicing them for the dehydrator and freezer.   You will get mango for "sweets" any time of year at our place!

We were still recovering from a lovely quiet family Christmas when we received a phone call to tell us that a visitor to our Lava Plains mining camp had noticed that our main power generator unit was not there.    A subsequent inspection revealed that some very well organised people had come into the camp while the place was empty over the Christmas break and had taken virtually everything - the genset, the fuel tanker and fuel, tools, small equipment, freezer, even the crockery, cutlery and chairs!   They even took the taps off the end of the pipes connected to the water tanks. 

Now that the wet weather in the north has let up, we have a crew on site trying to get the Lava Plains camp and mine ready for operation once again - but it was touch and go whether Jenny and I decided to do this or just say "why bother?", and walk away from it all.   The whole world seems to be loaded against the apparent minority of honest people who are trying to keep their businesses afloat.   It is a sad fact that in times of economic constraint the unscrupulous folk become even more bold when helping themselves to that which is not theirs.   Unfortunately the trail was pretty cold by the time the police finally got round to taking a look, sometime in March, when the robbery occurred in January!   

 Mining/Industry.

Our mining operations were quite limited last year, principally because of the extremely high costs imposed on us, and the lack of a reliable market for the bulk of the blue stone.

However, we are now reviewing this position as costs seem to have stabilised somewhat, and it appears that there is both a growing shortage of quality rough sapphire on the world market, and a growing reality of the importance of being able to authenticate the origin and nature of gemstones.   It remains to be seen whether this will result in a return of the traditional Asian buyers to this field to purchase rough.   There are a few remaining miners who go to Thailand to sell their rough stone direct to the factories, but this strategy does not appeal to us.   Once bitten, twice shy, and "been there, done that", and no thanks! 

Because of the shortage of reliable contractors in this area, and the very high rates that most of them have charged as a result of competition with the coal industry for both manpower and machines, we have been very fortunate to be able to keep our equipment occupied doing local contract work, and we hope that this continues.    It has always been an accepted part of the  make-up of the Gemfields that "if you do work for me at a reasonable price, then I can do work for him more cheaply.....and it will eventually come home"     We have applied this philosophy to our tendering for outside work and so far both we, and our clients, are happy with the result.

As we remarked in an earlier Report, all our clients who are jewellers continue to tell us that they are still busy at "the bench", manufacturing fine jewellery and using quality gemstones, but that the sale of lower quality jewellery or "shelf fillers" has declined considerably.  I personally gain some satisfaction when I see 'chain store' jewellers who sell synthetic or foreign made low quality jewellery closing down, and I know that a nearby Australian manufacturing jeweller is doing quite well even under these tough economic conditions.

Gemfields/Tourism.

The annual influx of southern tourists is already in evidence, and it is to be hoped that the predictions that Australians will holiday at home turns out to be true, for the sake of the economy of the local Gemfields businesses.   The Gemfields has had plentiful rain over the wet season, but mercifully there was no repeat of the tragic flooding seen here last year.  The grass is thick and green and the cattle are rolling fat, and the weather is still most pleasant, with coolish nights and days in the high 20's.

Our own business, while not exactly booming, is certainly running along satisfactorily, and the comments from many of the other local Gemfields businesses indicate that this year could be quite a good one, despite the gloomy economic outlook in many other areas.

Gem Shows

In keeping with our promise to ourselves to slow down a lot more, we have only attended one gem show this year so far, the North Brisbane Lapidary Club show at Hendra, and it was again a very good show.   We did not even 'do' the Trade Fair in Brisbane!

This Easter we decided not to make the long trip to Horsham in Victoria for the Australian Gemboree, but instead had a quiet family time at Calliope - which we thoroughly enjoyed and which may become more the norm for us as we try to avoid the long drives.   I have a very good excuse as my 'dicky' knee and shoulder react badly now to long days in a vehicle - and I'm sticking to this as my excuse!   It was our first Easter at home in ten years, as the nine previous Gemborees have been held, not necessarily in this order, in Ballarat, Gawler, Wagga Wagga, Rockhampton, Bathurst, Hobart, Gatton, Warragul, and Murray Bridge.   That's a lot of kilometers!   As an indication of the travels we have made in recent years, most of which has been to attend gem shows, our two Landcruiser station wagons now have 1,000,000 kms up between them!    While this has been trouble free motoring, and even the 'old girl' with 700,000 kms has not yet needed any major mechanical work, we don't need to run any risks!

Gemfest

The organizers of the Gemfest “Festival of Gems”, which this year runs from Thursday 6th to Sunday 9th August, are making every effort to promote the Festival and the entire Gemfields area as a place where visitors can either fossick for their own gem, or can buy one with confidence from any of the Gemfest exhibitors or from the participating local businesses. 

While the Gemfest centres on the Anakie Hall and grounds, the organizers are promoting the Festival as a “whole of Gemfields experience” and are using a series of sponsorships and a Gemfest Passport system to encourage visitors to travel throughout the entire Gemfields during their stay.  As an encouragement to do this, their passport is also their ticket to enter into a draw for dozens of prizes which include local gems and jewellery worth thousands of dollars.    Gemfest also caters for the tourist’s interests with a week long festival including the gem displays, mine tours, live entertainment, “stake a claim” games, and a whole host of other attractions designed to inform and entertain the whole family.

The Gemfest committee also acts to protect the interest of buyers by insisting that only genuine, natural gemstones are offered for sale and the inclusion of any non-genuine material is either discouraged or must be clearly and adequately labeled.    The Gemfest Committee has always done it’s utmost to prevent chemically modified (beryllium treated) material from being made available by any of the exhibitors, since visitors to Queensland’s famous sapphire fields would normally assume that all purchases made here are the "genuine  article".  

Information about Gemfest may be obtained from the Gemfest Event Coordinator, Louise Graham, on phone 07.49 844 375 or by e-mail to info@gemfest.com.au.                                                                    

In keeping with this theme, we, as Coolamon Mining, have invited several other Queensland gemstone enterprises to join us in our exhibition in the tent which we are setting up at the Anakie Gemfest site.   Exhibitors at this Coolamon stand will include Haigh’s Jewellers (Hervey Bay) with Fraser Island pearls, Mount Surprise Gems with topaz and aquamarine, an exhibition of Winton boulder opal, and chrysoprase from Marlborough.   There will also be specialist cutters, polishers and carvers, who will display their craft and will be able to cut gems to order for visitors to the festival.

One of those specialist cutters and polishers will be our friend Rod Beattie, who is an expert cutter of sapphires, opal and chrysoprase.    Rod is also the curator of the Thailand—Burma Railway Centre and Museum at Kanchanaburi in Thailand and is widely recognized as an  authority on the World War II Burma Railway, having thoroughly researched this tragic part of history and written several books on the subject.    When he is at Gemfest, Rod will be available to assist anyone seeking information on any member of their family who may have been one of the large number of prisoners who were forced by the Japanese to take part in the construction of the Burma Railway.

We will also be holding our usual sapphire exhibition in conjunction with several other members of the Queensland Sapphire Producers Association in the Multipurpose Centre at Sapphire, which enables buyers to make their purchases of rough and cut gemstones direct from the miners.   In order to cater for our many clients who will be involved at the Gemfest exhibition site, the QSPA Show and Sale at Sapphire starts two days before the Gemfest site at Anakie opens, running from Tuesday 4 August to Sunday 9 August 2009.  Buyers at this QSPA exhibition can also be assured that all gems sold by all the participating miners are genuine, and can receive Certificates to guarantee this.

Climate Change/Carbon Credits

The prospect of the ridiculous regulations and restrictions presently being bandied about in the name of "Global Warming" are, in my opinion, a load of absolute hogwash, designed more to promote the employment of bureaucrats and psuedo-scientists than to provide real benefit to the environment.   Kevin Rudd and friends have tickets on themselves if they think that by introducing a Carbon Tax in Australia, they are going to save the world!   All they will succeed in doing is to send honest Aussie businesses to the wall.   

The existence of global warming cannot be denied, as is evidenced by the sapphires we mine at Lava Plains having been thrown out of their volcanoes into an ice-age landscape, (the last eruption in that area is estimated to have been not much more than ten thousand years ago) but to link global warming entirely to the effects of human activity defies logic.   I am sure to buy an argument with some of you readers over this statement, but I firmly believe that we should control pollution for pollution's sake because pollution is bad for the environment in general, and not for some unsustainable link with naturally occurring phenomena which are beyond the control of man, no matter how hard the climate-change boffins might argue to the contrary.

The practice of taking over good grazing and farming land to grow huge forests of mostly poor quality eucalypts also, in my opinion, defies logic.   From my recollection of university lectures a long time ago, the process of removing carbon from the atmosphere and converting it into green matter is the "chlorophyll reaction" - and the effectiveness of this is proportionate to the leaf area.    The effective leaf area for absorption in a paddock of sugar cane, wheat, corn, or just ordinary pasture is, on an annual basis, at least as high or probably higher than that of the eucalypts, which also have a distinct growing season and a dormant season when little absorption will occur.

The Economy

Our predictions on the state of the economy, the stock market and the coal industry have all proved to be spot on.    I also believe that we may be proved correct again with our prediction that we will largely be spared the worst of the depths of the recession because of the strength of our "traditional" industries - as distinct from the new technological and 'boom' industries -and that this will be achieved despite the damaging negative impacts that government policies are having on these industries.

I know that many of our statements and predictions are controversial or, at least, contrary to the public position taken by many people who are far better educated in the field of economics than we are, but I have to say that we do not believe that we, Queenslanders at least, are in recession.  I believe that the excessive use of the "R" word by our senior politicians has more to do with providing an excuse for their own ineptitude and the failure of their much publicised corrective measures, than it has to do with reality.    Everyone should look around them and make their own assessments, and not be blindly led by the politicians and the media.

I personally believe that, while we are experiencing a serious correction of the malpractices and irrational behaviour resulting from the "boom", particularly in the mining sector, and that this correction has resulted in a severe downturn for those affected -  this is definitely not a recession,  not at this time anyway.   I further believe that our Queensland economy is quite capable of weathering this downturn, as long as the politicians don't stuff it up!  .

However, we continue to be amazed at the wasteful nature of both State and Federal Governments in their approach to handling this downturn.    The pre-Christmas Federal handout was a boon to those importing goods from China and other Asian countries, but did almost nothing for jobs in Australia - and we have no reason to believe that the current handouts will be any different.   The IMF and other world financial agencies have now downgraded our financial status, and I think that this is more of a reflection on their assessment of the Governments' response than it is to the problem itself.  Apart from their wasteful useage of the significant surplus which had been squirreled away for development for the benefit of future generations, our Governments seem determined to actively penalise all the productive industries by introducing legislation and controls which are contrary to the interests of the farmers, graziers, fishermen and the many other small businesses who, in reality, hold the key to economic recovery.

If only the money had been put into immediate job creating projects such as: upgrading of our rapidly deteriorating national road and rail systems; installing the infrastructure to reticulate treated water to parks, gardens and industry (but not domestic use); building some much needed dams and weirs (but NOT the Traveston crossing dam on the Mary River, unless it was done as a series of lower weirs which did not ruin the farming country or the environment!); renovating our dilapidated rural hospitals.....etc.  

I'm sure each of you could suggest your own pet project that could be easily put into motion to utilise local labour forces without long delays in implementation, if only there was a will to do it!     The billions of dollars spent would then not be totally wasted, but would have created something of lasting benefit to our communities, and on the way, the workers, suppliers and contractors would have paid tax which could be then used for more projects.   On the bright side, I suppose the Government coffers will have at least collected the 10% GST on all the predominantly Chinese made goods which undoubtedly were purchased with the proceeds of their "hand-outs". 

I realise that the Government has promised the allocation of significant funds for infrastructural development in many areas, but these do not seem to be getting down to the level required for actual construction within a reasonable time frame, at least they are not evident in the provincial and rural areas with which we are familiar.

It would appear to most observers that our Queensland Government in particular has made a conscious decision to favour those people who live within the area inside the "Beattie Line" - a "line" drawn around the Brisbane area behind the Gold Coast, behind Ipswich and the Sunshine Coast, within which money seems to be spent without question, while the rest of Queensland, which produces the bulk of the State's income, is starved of even basic community and communication necessities.   I'm sure that many of you who live within the "Beattie Line" will applaud the Government's priorities, but talk to your country cousins and you will get a different story.

Many people were caught out by the speed at which the economy unravelled, mostly at a time when the Governments were openly denying the downward trend.    Now while politicians are making dire predictions for the future, my feeling is that even more people are going to be caught out by the speed at which recovery occurs - and many people will be saying by the end of this year or early next year, "If only I had bought, when I had the opportunity"!!   Things are still tough, and money is tight for most people, but there are opportunities opening up out there now for those who are discerning and who have the available finance to take advantage.

In our sapphire business, people are cautious but are willing to spend money as they know that the articles we sell are genuine and the value is real.   The markets for agricultural products  have suffered some downturn, but still remain quite strong, and at least there has been a welcome and necessary start to reductions in the price of some farm commodities such as fertiliser, and to a lesser extent, fuel.   The coal industry is not 'dead' as the media   would have us believe and, despite some major job losses, our observations, on our constant travels on the Capricorn Highway alongside the main rail line between Rockhampton and the Central Queensland coal fields, would indicate that the transportation of coal to port is almost back to the flat out pace of last year. 

The news today about the 'swine flu' puts another wild card in the pack but, again, I believe we have the capacity to weather this as long as we do not let the Australian Quarantine Inspection Service get involved.    If they do, their track record from dealing with such imports as citrus canker and horse flu would indicate that we are likely to suffer the worst strain!

I personally believe that we need to be cautious, but do not be scared.    It is hard to predict when things are at the bottom, but it is easy to look back and regret missing out.

If I'm correct, the next six months will see the bottoming out of this economic downturn and a better-than-expected improvement in our economy - as long as the Governments don't stuff it up!!      My advice is, "if you see a good opportunity, and you can afford it, take it".

Best Wishes to All.         Jim Elliot.    Coolamon Mining Pty. Ltd.

 


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