I thought Shougangs investment in ARH was largely to secure raw material for the integrated steel making complex it is constructing in Tangshan and due to produce 10 million tonnes of completed product from 2010.Given their size and their ore requirements i cant see them not proceeding with this. In fact i think they will be assisting ARH to negotiate further tranches of ore from Palmer to guarantee a very long term and secure source of ore from a politically stable area that is located a shorter shipping distance from China than a number of its competitors.This of course does not take in to account any further expansion plans this Chines Govt owned entity has.
Look at the efforts the Chinese are taking to secure influence in some of the mid west miners who have reserves that are miniscule in comparison to the estimated 60 billion to 80 billion tonnes Balmoral is reputed to hold.
ARH Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
