Mining? Boom!

So, the mining boom that would last for 25 years appears to be losing some steam. Will this be one of those "forever" kind of things? Who knows!

But this is what Fairfax Media Rania Spooner reported today:

"Billionaire Andrew Forrest's iron ore empire - branded the 'Fortescue family' for its collective approach to success - has endured what insiders are calling the most horrific week in the company's history.
"But Fortescue has paid a price for its survival, shedding as many as 1000 'family members', including long-standing senior executives hired by Forrest himself, in an aggressive move to wipe $300 million from the company's operating costs." (See here)

Jade MacMillan and Gian De Poloni (ABC):

"It is understood several hundred contractors at the Solomon site have already been sacked.
"One contractor has told the ABC, staff were called in earlier this week and told to check a list of names pinned to the wall.
" 'The people whose names were on there were told they'd been sacked,' the worker said.
" 'Some people were crying, it was pretty awful'." (See here)

Yup, Fortescue "paid the price", but those crying were the former "family members": to the best of my knowledge, contractors are entitled to no redundancy, no nothing.

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Peter Martin has a lot (and I do mean a lot) more on this. Some bits and pieces:

"What's galling to someone concerned about economic management is that they (commodity prices) are coming off the boil at exactly the time the government has switched from pumping money into the economy to taking money out. (...)
"The new financial year has begun with the resources downturn worsening and the government turning the money tap off. Everything has to be cut back in order to achieve the promised 2012-13 surplus. (...)
"And it probably had to be cut back more in the budget review due in November. Asked Wednesday what he would do if the iron ore price didn't recover Swan said it would make his budget task harder and that he would cut harder.
" 'We are absolutely committed to delivering a surplus in 2012-13,' he said. 'The government has a proven track record of delivering savings and we remain able and willing to do it again.'
"Former Reserve Bank Board member Warwick McKibbin says cutting harder when economic activity is turning down is almost a definition of economic stupidity." (See here)

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Three closing comments:

1. In the end, it all depended on China (as I said here)
2. The stupidity thing applies both to governments at the federal and state levels (see here)
3. What is going to happen to foreign workers brought in to fill the mythical skills shortage?