GREY:ADEXF - Post by User
Comment by
greenandgoldon Sep 15, 2011 1:50am
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Post# 19044075
RE: RE: RE: XXP Due Diligence
RE: RE: RE: XXP Due DiligenceWith a typical offtake agreement XXP will still pay the spot price (or a slight discount) per tonne. China wants to not be held hostage by the Big 3, hence they are buying into iron ore companies, but they're still pay fair prices for the product.
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Also, 700 million tonnes of ore, at 26% iron, only produces about 280 million tonnes of 65% iron ore concentrate. More like 50 years not 150 years.
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I agree that Roche Bay would be very attractive for $1 billion in capex. But with ArcelorMittal estimating that Mary River could cost up to $7 billion in capex, I don't see how Roche Bay doesn't cost multiple billions.
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Subtract $2 billion for the rail you don't need to build but everything else Mary River needs (massive ice-breaking ore carriers and deep water port especially) Roche Bay needs also.