let's assume we have reached the bottom of the cycle.
the cost of production for BHP = US$35
the iron ore price = US$43.98
Profit = $8.98 say $9
the number of tonnes to be produced = 290m
Profit for next year will be $2.6bn
Iron ore makes up 55% of BHPs profits
I estimate that BHP will make about $4.7 bn next year
5.3bn shareholders
earnings per share will be 89 cents
price to earning = 18.77/.89 = 21
21 is not a bad multiple for a resource company at the bottom of the cycle with growth potential
Brazilian Govt to sue BHP and Vale for 7bn, page-37
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