So I would expect the discount to get smaller as the market stablises.
The only people who seem to think the market is going to stabilise are posters on this forum. The WA government has a target of just $64 by 2023. Fitch Solutions has a $52 target by 2030.
Prior to 2008 there was no market for 58%. That is why the FMG channel iron deposits were never developed by the previous owners.
IBO produces 67%Fe and this will be by far the biggest high grade operation of any of the Australian iron ore companies.
Vale already does so - in vastly higher quantities than IBO will ever achieve. Simandou is 65% Fe and will be producing before 2025.
This is another technology that, once rolled out, will give FMG an even more premium product that no other iron ore miner in the world will be able to match.
RIO are doing the same thing.
"The partnership will explore the viability of transforming iron ore pellets into low-carbon hot briquetted iron (HBI), a low-carbon steel feedstock, using green hydrogen generated from hydro-electricity in Canada. "
"Iron Ore Company of Canada (IOC), in which Rio Tinto holds a majority interest, will supply high-grade iron ores and expertise in mining, processing and pelletising. Paul Wurth brings expertise in plant building and process knowledge in the field of highly efficient hydrogen generation and Midrex® direct reduction plants. SHS brings deep iron and steel making expertise. "
No other major iron ore miner in the world is even close to FMG in terms of the response to the growing grade premium.
Because it is totally outside the competence of mining companies and requires hundreds of billions in capital. Even RIO is using steel manufacturers using proven technology. The BHP DRI plant at Port Hedland was a total fiasco.
FMG Price at posting:
$15.34 Sentiment: None Disclosure: Not Held
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