comments byhanlong & 2nd offr delay good 4 sdl, page-10

Hey Naza

RIO BHP and Vale know that the 100mtpa increase is not even enough to satisfy the increase in demand for iron ore between now and 2015. Demand for ADDITIONAL iron ore each year from China grows by 60-70million tonnes.

If we do the calcs, demand from China between now and when the Nebeba and Mbalam iron ore project go live in late 2014 early 2015 will be an ADDITIONAL 200-250million tonnes per year!

Read a few posts from last year on this topic from the old time holders in SDL about the world sea borne iron ore market. Posts made early to mid 2010 on HC!

The demand for high grade iron ore will continue to be so strong, that SDL's supply will only meet the extra demand China is screaming for.

And this doesn't include India's supply falling from last year's 110mtpa, to 80mtpa this calendar year to zero by 2015 as they reallocate iron ore from exports to domestic use as India begins their GDP Per Capita Growth from the current $2000 per person to $8000 per person!

The price of iron ore wont fall below $130 per tonne for a very long time. What China is doing with the purchase of SDL is taking a little off the peak, eg keeping the peak price during the times of strong economic growth in the CHinese economic cycle to a maximum of $200 per tonne.

CHina's economy is currently in a mid cycle "slow down" from 10% GDP in 2H2010 to 9.4% GDP last month. Yet iron ore spot price is still $175 per tonne or more.

What is going to happen when demand begins to grow again in China? $220-240 per tonne spot price?

This is all that will be achieved by SDL being taken over.

It has nothing to do with a lack of "rating" this project.

Cheers Nectar