The most recent Report from Ocean Equities implies FMG could be...

The most recent Report from Ocean Equities implies FMG could be a very warm favourite to have a go at UMC.
Part of Ocean Equity Report:
"However, in our view Fortescue has a greater incentive to look at the various Pilbara development companies than either BHPB or RIO
despite the fact that it would not be able to enjoy the same level of synergistic benefits as BHPB or RIO given its location (Fortescue’s
existing rail is ~120km away from the Railway deposit). The greater incentive to deal largely comes from the fact that Fortescue’s
infrastructure continues to have excess capacity and production continues to struggle to ramp up (particularly because of grade control
and alumina levels – both of which potentially would be improved with securing ore from the Railway deposit), and we believe a new
US$5.5b+ capital investment provides Fortescue a clear mandate to look to regional corporate activity with high quality and
neighbouring iron ore juniors with the aim of: improving the capacity utilisation of its infrastructure networks; improving its product
spec’s; and providing near term incremental production with minimal capex. While significant additional “infrastructure funding” from
the Chinese may be a nearer term reality we believe that the majority of mines that are expected to supply the ore for Fortescue’s
expansion plan’s remain very much conceptual (refer Exhibit 9 to 11).
Furthermore, given Fortescue’s strong relationship with the Chinese steel mills and strategic investors, we expect the Chinese to look to
leverage their current and future potential investments in Fortescue by increasing infrastructure utilisation and access to 3rd party ore,
either through additional MGS’s, JV’s or direct asset acquisitions. We believe that Fortescue would be able to truck haul up to 6mtpa
from the Railway deposit potentially from early 2011."
Regards
Buffett