TimTreadgold:Briefcase - Bouyant mood at Kal’s annual bash

Last week’s Diggers & Dealers bash left the 1,200 delegates and countless hangers-on, including a healthy contingent of media types, in no doubt that this boom has legs to go an awful long way.

In fact, debate over whether we are in a super-cycle of steadily rising demand and high commodity prices has shifted up a notch. As one knowledgeable investor said to Briefcase in Kalgoorlie, “it’s not a cycle at all, it’s a new industrial revolution”.

The name game might seem irrelevant, but once you start to think in terms of a revolution, which might last 50 years and more, everything else changes. Merely dropping the word ‘cycle’ from the description of what’s happening in Brazil, Russia, India and China (the so-called, fast-growing, BRIC countries) has an immediate, and uplifting, effect on confidence.

Briefcase, in its usual overcautious way, is not sure whether to sign up to talk of a revolution, which could have as big an effect on the world as the original industrial revolution that changed Britain and Europe in the 18th and 19th centuries.

But there is certainly no current sign of any slowdown in demand for natural resources.

In the week of D&D and, who knows, perhaps because of D&D, at least 30 mining and oil stocks hit new 12-month rolling highs. Last Friday alone, as weary delegates made their way home, an astonishing 26 mining and oil stocks scaled new price heights on the Australian Stock Exchange – and one hit a new low.

Odd man out was Bonaparte Diamonds, which admitted, with the corporate equivalent of a red face, that its first attempt to find diamonds in the waters of the far north Kimberley region had produced nothing. The shares promptly fell 63 per cent to 14 cents. At best it was a case of nothing ventured, nothing gained. At worst a case of what a silly idea to start with.

The better news was found in the positive columns of the share tables, where anything giving off the slightest whiff of a commodity was on the move, led by the twin giants of the game BHP Billiton and Rio Tinto.

Collectively, the big boys added around $6 billion to their stock market values last week, with BHP hitting a high of $21.05 and Rio Tinto $53.02 – and perhaps they’re even higher by the time you read this.

Other stocks setting records included AED Oil, which is developing the old Puffin oilfield in northern WA waters and traded up to 81c. Bemax Resources, which is developing a new mineral sands mine in NSW, hit 28c. Iluka Resources, another mineral sands miner and also a takeover target, reached $8.64. Fast-growing coal miner, Centennial Coal, was up to $5.48, and the zinc specialist Zinifex reached $3.50.

One day does not, of course, make a trend. But what’s happening on the market was very much reflected in the mood at D&D, where some observers mistook the serious tone as a downbeat sign. Far from it. This year’s event was the biggest and best ever, largely because so many resource companies are moving out of the exploration phase and into production – what might even be called a form of growing up.

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Other points worth noting from a few days in Kalgoorlie. Not all of the bankers who made the trek were a happy lot.

More than one was heard to complain about the sub-standard accommodation (welcome to country Western Australia boys), and one was muttering about the fact that people like Kerry Harmanis from Jubilee Mines wouldn’t borrow any money.

The charge against Mr Harmanis, and others, was that they ought to borrow a few hundred million because now was an ideal time to expand.

Briefcase almost feels sorry for the poor bankers who just don’t get it – why borrow when you’re making so much money from nickel sales that the only banking problem you have is filling out the deposit slips every Friday when you bank all the spare loot.

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And, a final word on Diggers – how is it possible that no-one in the mining industry has made a takeover bid for the skills of Suzanne Christie, the conference administrator, who performs brilliantly, under great pressure, year after year, while fielding the most inane inquiries, without batting an eyelid.

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Much fun has been made of Kevin Reynolds, the union leader with an extensive share and property portfolio, who is leading the attack in WA on proposed changes to industrial laws by the Federal Government.

Briefcase has no reason to join the criticism of Mr Reynolds. In fact, it really ought to be praising the chap for having the brains to invest wisely in property and shares, if a report in last Saturday’s edition of The West Australian was accurate.

Well done Mr Reynolds, welcome to the world of capitalism – and perhaps you can use this little snippet when retaliating against those who accuse you of hypocrisy in your self-declared class war.

In the same edition of the paper that called you a hypocrite (leader, page 18) there is an amusing little example of the pot calling the kettle black. Page 4 of The West screams (first sentence, first paragraph, page 4): “Sales of The West Australian have continued to rise”. Which is true, up to a point.

Paragraph four of the same article begins:  “Sales of The West on Saturday slipped 0.17 per cent compared with ….” etc etc.

Now, let Briefcase think for a second. We rose in the first paragraph (but apparently only mid-week), and fell on Saturday (the flagship edition). Leaving the question of when is a rise not a rise – correct answer: when it suits you.

Ah, hypocrisy, it comes in so many shapes and sizes.

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“A little sincerity is a dangerous thing, and a great deal of it is absolutely fatal.” Oscar Wilde.