From Bloomie comes this today:
A prefabricated six-story hotel, once destined to house BHP Billiton Ltd. (BHP) workers, is sitting in 126 boxes stranded on the Melbourne city docks. The stalled project is a sign of the deepening global slowdown in mining.
The contents were to have been assembled 1,990 miles away at Port Hedland, where BHP planned to use the hotel as temporary housing for its estimated $22 billion harbor expansion to export more iron ore. That was before the world’s biggest mining company scrapped its plan, and the hotel developer went bust.
…Hickory Group, the building contractor, is in talks with various groups, including in Port Hedland, to buy the completed first stage of the steel, aluminum and glass hotel, Michael Argyrou, managing director of the Melbourne-based company, said in an interview. The parties were “serious” and Hickory is hoping to complete a deal within the next few months, he said.
“The plan was to have Hickory send our people up there to put together the parts like in Lego to create the hotel,” Argyrou said. “They’re still sitting at the docks.”
Some still hold out hope that the miners are cutting prices quickly enough to avert further price falls:
“During the bull time of the cycle the big miners were throwing everything at everything,” Joel Crane, a Melbourne- based commodity analyst with Morgan Stanley, said by phone. If new projects are shelved “that may lessen the severity of the very steep decline in prices most analysts have in their forecasts,” he said.
Other, more sensible folk, are onto the truth.
“We expect our super-cycle sunset thesis to continue to play out in 2013,” Citigroup analysts Heath Jansen and Jon Bergtheil said in the report. China was becoming a “far less commodity intensive economy” just as a number of projects were set to deliver first production this year, they said.
Whas is fascinating to me is that it is somehow cheaper to ship an entire 6 story prefab hotel than build it on site. No doubt that’s a function of the extreme labour costs associated with remote construction but it also gives you an insight into just how uncompetitive Australian construction and manufacturing has become with a high dollar.
