They still have to work out a way to get the ultra high phosphorus and alumina content out of the iron, that's of course if it's in the iron itself.
They're guessing that it's in the host rocks (sandstone and clay) from what I understand.
Furthermore, it will not reduce the levels of impurities to ever realise the spot iron ore price whether that be $120 or $80. Discount the iron ore price by at least 25% and discount it further for not being at 62% to get a real Agbaja iron ore price then we are really talking. Add in interest and depreciation costs to get the project going and you have a completely different cost analysis. A $50 per tonne cost to get the ore out of the ground is more than an off the back of the envelope estimate in my opinion.
Many Australian iron ore miners produce at costs between $50 and $60 so I don't see anything special from Agbaja. Throw in a corrupt Nigerian government and a state (Koji) in disarray from recent floods and you have in my opinion an unstable environment to do business in. More so now into the future.
If Ian Burston is able to deliver what he says he can he will be bigger than Andrew Forrest but never in terms of wealth.
The metallurgy results will reveal all (you would think).
Just because someone has done some great things once or twice doesn't mean they can do it again.
EIO Price at posting:
32.0¢ Sentiment: None Disclosure: Not Held
