Iron ore price, page-205

I know your argument on long term price is set by the bottom of the cost curve. That's how we were taught to see it when we all first started, the more i worked in this space the more i realised, that estimation has never been right because prices are the result of the push/pull between supply and demand - we have never seen any product in any major industry being set based on cost/plus.

Oh dont think BHP and Rio didn't know the full danger of FMG - i know for a fact BHP had for years a specialised team internally with the sole purpose to take down FMG. lol. They knew all too well FMG was going to harm their market control.

Vale - I am of the view that their new project is to replenish their production profile not expanding. I also think they are under some other issue (but i dont have any factual source to point to so you can disregard that point if you want). Roy Hill, Roy hill is not lower cost than FMG. Also neither S11D or Roy Hill are news to the market. In my memory, people have been using these two as an "against" argument for iron ore price recovery for what at least 3 years so by now i really think they have been fully priced in already. Lastly, even at full capacity the total tonnage of these two are just a fraction of what has come off from the Chinese supply. You really need something like the size of Simandou to sufficiently offset China's supply pullback. How much you think China will reduce their production by is the key question here.

Inducement capex - I am still not sure what that is - is it the same as breakeven price? okay firstly, i mean Simandou was cheap, but not that cheap lol. Especially once you add in the transportation cost given the mine's location and port costs. and total project return wise, that upfront capex really kills your economics, let alone the significantly higher chance of losing that capital entirely.... Simandou is not Caraj in the 80's, and 2017 Guinea is not 80s Brazil. Technological advancement in the mining space alone has caused major shifts in the cost curve over the last couple of decades. So that's not an apple to apples comparison. Even based on its original estimates it won't markedly lower the cost curve. Honestly Australian iron ore operations are really efficiently run and their current level of reported realised costs are really competitive. Not sure if this paragraph is answering your last point, lol. sorry if not understanding your last point properly.

Anyways - i mean like i always say to my clients, mining investment comes down to your view on the commodity price, that's it, nothing else. No view is right or wrong, you make the best educated call based on what you know and can find and what u think may or may not happen.