The decision by Rio Tinto not to progress with its deal with Chinalco has huge (positive) ramifications for AGO and the wider iron ore industry.
By 2012 if AGO meets its production target of producing 12 million tonnes a year it will become of massively increased importance to the Chinese Steel industry.
Let's not forget also that they have a magnetitite deposit capable of producing 15 million tonnes a year over 30 years. A deal which now looks certain to take place with an opportunistic buyer.
With the cancellation of the Rio/Chinalco deal AGO has become a much bigger and brighter takeover target.
AGO Price at posting:
$1.72 Sentiment: LT Buy Disclosure: Held
