Iron ore resources and other hot "fever"

From Australia to Peru to Indonesia, global demand for commodities such as coal, iron ore and copper over the years has brought wealth to mining areas and has also promoted economic growth in resource-rich countries.

Now that this “resource feast” has begun to end, the pain caused to the local people will be as much as the joy that year.

U.S. media quoted Australian real estate agent Bella Alex Portdisso as saying that two years ago, as coal prices soared and attracted countless workers and investors to the Australian inland town of Moranbow, Queensland, she could sell one day. 25 houses. And this May, she only sold 3 in total.

“This small town was heavily injured,” said one miner at the Goonyella Riverside. “It feels like it's being chronically dead.”

Resource prices plummeted The prosperity of the mining industry even led Australia to escape the global financial crisis that has hit other advanced economies. Alex Podsau said that during the period of rapid development of the local coal industry, a single-family house near her company had a monthly rent of nearly 7,000 U.S. dollars, and the house is now vacant for a year.

In recent years, various factors have caused commodity prices to fall, and even drastically collapsed. The price of steelmaking coal has fallen by half from about US$110/tonne in early 2012 to the lowest level in seven years. Iron ore prices fell from US$190/tonne in 2011 to below US$95. Prices of copper, gold and other commodities have also declined in varying degrees.

Optimists believe that the current price is still higher than 10 years ago, and there is still hope of recovery, but the current price has caused losses for some mining companies. Giants in the industry such as BHP, Rio Tinto PLC and Anglo American PLC have said they will reduce costs and respond to market fluctuations.

This means shutting down the mine, temporarily not starting new projects, and making layoffs in some mining areas. Although not all mine towns are as bad as Moranba, the downward trend is a reminder that over-reliance on commodities may be dangerous.

Mining sharply layoffs in South Africa, platinum, gold and coal companies have laid off thousands of people, including small mining areas such as Carltonville in western Johannesburg. Local officials said in their recently released annual report that they are sorry for the excessive dependence on mining in “problem-stricken areas”.

In addition, the mining and oil royalties and rents received by the South African government during the year ended in March 2013 also fell by 20%. Last year, South Africa’s overall economic growth slowed from 5.6% in 2006 to 1.9%, partly due to the decline in resource revenue.

The Brazilian economy has benefited from the export of iron ore and other commodities. In 2010, the country’s economic growth rate reached 7.5%, but in the following three years it experienced a sharp decline. According to data released by the Brazilian Geographical Statistics Bureau at the end of last month, Brazil's economy grew by only 0.2% in the first quarter of this year. The latest forecasts of the Organisation for Economic Co-operation and Development and the International Monetary Union show that Brazil’s economic growth in 2014 was only 1.8%.

The work in Palau Appezpai in the north-central city of Brazil is also increasingly difficult to find. “I have lived here since 1997 and have never had such a lack of job opportunities as I am now,” said Santos, a 38-year-old mechanic.

At present, the Australian government is working hard to fill the gap between income and job losses caused by the ebb of resource boom.

The Australian economy relies heavily on international trade. Iron ore and coal rank among the top two in the country's exports. Eight of the top ten commodities and services exported from Australia are bulk commodities. In the heyday of commodity export, the annual salary of a coal truck driver required to reach 200,000 Australian dollars (about 1.168 million yuan ***).

Today, Queensland, rich in coal resources, feels some profound pain. According to the Queensland Resources Commission, nearly 10,000 miners have been laid off due to the loss of many coal mine operations.

According to an estimate by Jody Elliott Consulting, a professional human resources company, in the past 18 months, the Australian mining industry has laid off 30,000 people. Last year was the worst year for employment in Australia in the past 20 years, which was largely due to the weakening of commodities. According to data released by the Australian Bureau of Statistics, the unemployment rate in Australia reached 6% in January this year, the highest level since July 2003. However, the unemployment rate remained at 5.8% in April, better than previously expected.