5.60 offer, page-9

It's been mentioned to me before, that I ought to have a look at bagging some MIS. I did a bit of work on the iron ore producers and wannabe's and MIS had the most dirt with the least viable route to market. I cite here the rejection by the WA government of the license to cart ore via trucks.

Initially, the MMX/MIS merger looks sensible on paper because of the synergies. Certainly, MMX would get a lot of benefits from it, and it has the backing of Mitsubishi, which would also accrue benefits from being able to operate both mining centres, etcetera.

However, Sinosteel if it lets MIS get away from itself, will lose one of the few viable opportunities it has in getting guaranteed supply, outside of brokering a deal over some of FMG's ore or finding another small hematite hopeful to back - and that is five years or so down the drain and no one has the right mix of tonnes and geography yet.

Sinosteel will want this takeover. They can always come to bed with Mitsubishi/MMX in a JV later - one the MIS boys appear to have been too pig-headed and big-cojones'ed to maintain from when the Midwest Alliance was struck.

As for the FIRB approval - it was pointed out some time ago, probably by Sinosteel itself, that it is hardly like buying Rio or BHP's assets - the MIS deposit it only <5% of the iron ore in WA. It is hardly the same as Newscorp trying to leverage in to every major newspaper in every city in Australia, or someone buying Bundy Rum and refusing to leave enough for the bogans and queenslanders.