BHP, RIO 'not acting in Australia's best interests', page-273

I thought the issue of FMG was the sustainability of its debt repayment.

Most bulls here like to quote the company presented figure of $18 cash cost and bench marking it against BHP/RIO, then it would appear to be a low cost producer.

I am suspicious of this figure as it does not take into account the sustainability of the cost cutting, exactly what components are they maximizing of this cost cutting exercise beside the headline FIFO and contractor margin alterations.

Cloudreak remains the highest cost operations in the Pilbara from memory so they will have to address this issue affecting their global costs. I suspect they are caught between producing quality ores in a sustainable way or simply focus on tonnage to reduce the fix costs.

If the IOP remains at the so called long term average pricing assuming between 30-50$ levels, the forthcoming financials will be compelling reading to gauge the risk of a going concern. Meantime they could still progress along and offer short term traders opportunities to trade but simply buy and hold below water level is a very risky way to get exposure in this sector especially high debt producer. Good luck.