I've weighed in on this before but unfortunately I'm a Vale sceptic. That's no fault of AVB, it's just that their timing couldn't be more wrong. While iron ore companies such as Vale and FMG are talking the talk when it comes to iron ore price, this is coming across as wishful thinking at the moment.
The Chinese are IMHO on a buyers strike so they can force producers onto sub 100 dollar contracts.
Vale can probably let the option drop because, hey, who else wants it? Then come back next year and renegotiate the 40m payment down to 10m.
Alternatively they've struck the motherlode and are haggling over price.
One thing that was never clear from the anns was how this was going to be arbitrated. We'll see.
AVB Price at posting:
6.7¢ Sentiment: None Disclosure: Held
