fmg profits and future at risk, page-31

Hi David,

I disagree with your concept of increasing production in a bad time to main profit. Increase production will even make the IO price lower in a bad time. Supply and demand theory!!! You need a bit of economy sense and not common sense.

What BHP & RIo are actually doing now is to shelf all their expansion projects (Worley Parson, SKm & Fluor JV, Caliber are laying off their ppl atm in view of BHP & RIO projects on hold), they are reducing workers to cost cutting.

When their fixed overhead is reduced, the breakeven point will be lowered. And when this breakeven point is lower than the IO selling price and bang they are making profit. This approach is more proper. You need to educate yourself a bit of economy studies.