They have plans, these plans didnt count on $150 a ton ore or above
Its the backbone you could say
any growing manufacturer MUST have good iron ore supplies at lowest cost
The Indians are racing against the Chinese, its like 2 young kids growing fast and competing, Both iron ore supplies and India comp is a serious threat to chinas growth, if they can (and i dont dought the chinese) become a top iron ore producer it will give them the edge
India has a fair bit of iron ore
The main thing to remember is the plans didnt include $150 or higher iron ore prices so its a government concern of the highest
Remember the spat when iron ore 1st started to jump up and they couldnt understand why our PM didnt step in and reprimand BHP as the chinese dont understand free market, poor old John Howard was perplexed and had to explain to china its a free market,supply and demand is the issue and they have to sort it out themselves
Dont sell low as its a huge deposit, maybe the last one of this size and the stage its at is where the big % gains are made, the next 2 years or the lead upto production is where the $$$$ are
It needs to be brought to production, the chinese will have to partner with us if they want in, its not for sale
I hold, go long
SDL Price at posting:
50.5¢ Sentiment: LT Buy Disclosure: Held
