A lot of irrational and naive arguments in here. Mostly based on emotion and ego, very little on logic and, in some cases, fact.
I could go on, but you get the picture.
- BHP and RIO's long term goals are not to drive the small player out.
- small, high cost producers are beneficial in that they hold up the supply-cost curve
- those same producers provide a point of difference to the big producers: steel production is all about feed consistency
- the small producers account for a pretty small tonnage of seaborne traded supply, shutting them down would have a short lived affect on the market
- Shutting down high cost producers is transient at best: as soon as the price rebounds (due to supposed under supply) the small producers would flood back in. Eg, Territory Iron and Western Desert Resources (in receivership) could restart production overnight.
- Sure, the state owns the minerals and collects royalties, but the risk in mine development lies with the shareholders. A tonne of iron in the ground is worth about $0.50. Its mined and exported royalty is worth about $5.50 per tonne. How is Australia not reaping a benefit?
- Vale's VLOC are not making any dent on pricing dynamics. SDL's proposed VLOC will be likewise irrelevant - simply because they will not have the volume to make a difference.
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what next, page-23
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