rio - bhp jv on iron ore, page-30

I think we can expect a huge increase in drilling by UMC paid for one way and another by China
Logistics is everything in IO and from a Chinese perspective for this neck of the woods it means a spur line to FMG.
From their perspective this spur is not a standalone project but one that will bring down the price of every ton they purchase.
Furthermore it will encourage more exploration in the area because juniors will see a way of getting product to port.Put the railway in and someone will find product to go down it fr the next 40 years because I dont believe the surface has even been scratched in this here.
Just some threat of doing so will help keep the new semi-monopolistic alliance from being totally unbridled particularly if it is of the order of say 50m tons pa.
Of course ports are another issue.
Whether they pay an extra $1 $2 or $3 a ton to get new production in is irrelevant compared to the $10's of dollars of price rises they could prevent by having greater competetion.Multiply $10 per ton by their total imports to get an idea of the numbers involved and you will see how irrevant the cost of subsidising juniors is.
They will however have prove up the ability to reach the crtical density before comitting the the big dollars.
In summary I think we could see UMC with or without partners thinking at a new level and getting support from the Chinese State gov Unions and others to do so and FMG getting in on the act
UMC DSO is particularly valuable in these circumstances.
Unfortunately I think other juniors like IOH will move faster price wise than us initially because they are more obvious but in the next three months this is going to be very interesting.