Well, that's a single Fund Manager's quote and they are prone to protecting their client's interest of course. What's to say he/she is correct...but let's assume they are.
Mbalam-Nabeba (at 40MTPA) on its own may not cut much swathe into the 650MTPA that Australia sells each year to China, but once you start linking the multiple mines in the Region (Akon, Nkout, Mbarga, Nabeba, Avima, Badondo, Belinga etc) you're getting to 250MTPA+ of high grade alternative.The Sangha deal itself proposes 150MTPA and I don't yet think we know the totality of it. Australian IO Producers could cut prices, but with their major client finding 30-40% of it's IO requirements elsewhere, Australian producers will have to find other markets - notably India & Asia. How much can they afford to enter into a price war to stifle development of a Central West African region that is stacked with enough high quality resource to keep China happy for the next 25-35 years or more? You find other markets, not cut prices to further aggravate an already angry Titan.
The other point I think of is the foothold that a Central West African IO play gives the Chinese, not only guaranteeing quantifiable supply but also the opportunity to get a firm foothold/beach-head to extend far beyond the Sangha States, into adjoining areas such as Guinea (Simandou), _Gabon (Minkebe, Belinga) and the RoC (Mayoko-Moussondji). Build a Steel Processing Mill at the Port of Kribi and supply African demand for wealth creation and Nation building without having to trans-ship Ore to China to process and send back. Do it from Kribi. Once you have 30.000+ workers coupled with rapid Chinese infrastructure building capacity and you have a mobile workforce that can keep building throughout Africa...a continent where the Chinese have found favour since the demise of French rule.
