is it worth hanging on, page-34

Riddick,
the steel plant is up and running and using Vale ore. It is 100% owned by Ansteel and they can put through it whoever's ore they choose.

The pellet plant is still to be built- it hasn't even been started because it is dependant on GBG owning 50% and finance from CDB.

I never suggested they will not develop it but to answer your question the reasons could be many-

* Current global and Chinese economic climate effects and future expansion plans of Ansteel is unknown to probably anyone else bar Ansteel.

* Ansteel's current operations will not miss a beat if GBG deal falls over or gets postponed.

* IO prices are tumbling and suggestions of upto a 45% cut in next year's contract prices are being suggested by analysts (crystal ball stuff ofcourse). Makes ore from current suppliers attractive again.

* Because of contract prices most likely dropping, Ansteel could delay borrowing the well over $2B to fund the 12mtpa startup in a slowing Chinese environment and instead just choose to run with the suppliers they have and postpone $2B of debt and risk. The 41.4B is just the start of debt.

* Ansteel have GBG by the balls, postponing would bring GBG to its knees and Ansteel could mop up the rest of GBG and all its resource for next to nothing in this environment.
What do you reckon the GBG shareprice would go to if Ansteel said they were postponing plans???

Before I get attacked, I could write a similar post outlining the positives for Ansteel but I am just answering Riddick's question.