GREY:ADEXF - Post by User
Comment by
greenandgoldon Sep 15, 2011 8:21am
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Post# 19044321
RE: RE: RE: RE: RE: XXP Due Diligence
RE: RE: RE: RE: RE: XXP Due DiligenceAXI, if it intends to ship 5 million tonnes of anything, definitely needs icebreaking ore carriers. The ice-free shipping season isn't long enough to ship that much material. Year-round shipping requires massive ice-breaking ore carriers, a type of ship that currently doesn't exist and will have to be constructed especially for this project. Baffinland says it needs to build 9 of these ice-breaking ships, each able to carry 190,000 tonnes, to ship 18 million tonnes a year, on the short route to Europe. AXI might get away with 3 of these kind of massive ships to ship its 5 million tonnes to Asia.
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5 million tonnes divided by 190,000 equals at least 26 round trips to Asia. How long is a round trip? 28 days or so? It's easy to see how the logistics become impossible without multiple ships.
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It's an absolute travesty that AXI's management doesn't even mention shipping issues in its investor presentation. Not a word about ice, not a word about how to manage year-round shipping.