TU for a thoughtful post - great to see that some good ideas are getting bandied about. Thanks.
The total cost in lost earnings issues would be a little more complex than you suggest for BCI/FMG 23million tonnes scenario. For IOH the 80million or so in 'handed over' ore for a JV would not even be mined for 6 or 7 years (so ore prices could be lower anyway), but even at a $70/tonne gross profit the effect of devaluation through lost opportunity, at say 10pct, would mean that in year 7 the 12million of ore sold would be worth just over $35/tonne gross profit, and it goes downhill from there. Factor in tax issues, any interest payable on CAPEX if IOH were to try and go it solo and it all adds up to a pretty sweet deal if FMG are willing to go JV on this (to my mind anyway).
I did like your comments about some of the bonuses to FMG as that is what they will clearly be looking for in any deal here. Time and money saved is a pretty big incentive!
IF this gets announced as a done thing at some time this year then there will be plenty of happy people. :)
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