GREY:ADEXF - Post by User
Comment by
rpdelucaon Jan 11, 2013 11:20am
143 Views
Post# 20825737
RE: RE: RE: RE: Meanwhile.......
RE: RE: RE: RE: Meanwhile....... You answered your own question. It was a proposed $5Billiion project with massive costs related to builing a railway. Why a railway...because they are miles and miles and miles away from a port. They are now going back to trucking the iron ore to the port. So in very simple terms, AM is not walking away from their project because they cannot operate in the north. They are scaling back their project because they are in massive debt and trying to finance $5 Billion in today's markets is very difficult...
The news of AM is not welcoming but does not change the plans for AXI. The biggest difference is that they don't have to rely on building a railway and their CAPEX already factors in port and production facility. The railway for AM kills the CAPEX. The fact that AXI's OPEX came in at $49 proves that location is critical especially if you are operating in the north. If any rail transportation was required, this number would have easily been over $50 and we won't even talk about where the CAPEX woudl have been.