Pbawley Apart from a general sense of what is happening with...

Pbawley

Apart from a general sense of what is happening with mining contracts currently, I got the sense that margins would be low from the words in that article, “The weaker Australian dollar, using niche contractors and lower labour rates could see the mine built within nine months.”  I used negotiate contracts as a significant part of my service as a contractor, and my experience is that a clued-up buyer could negotiate better deals with a niche supplier via direct negotiation than what a tendering process usually delivers. Direct negotiation allows for each party to swap advantages optimally – e.g., give a longer term contract in return for a lower tariff.

I too am dubious about Iron Bridge going anywhere in a hurry. Iron Bridge is basically a magnetite ore body, and magnetite involves on-site processing to raise the Fe percentage, and to get rid of silica, and so it usually requires a higher iron ore price to become viable. A search on this topic uncovered http://www.smh.com.au/business/mini...o-grow-magnetite-exports-20150520-gh5zqm.html

Magnetite has a future, because its final product is cleaner, but now is not its time. Enriching magnetite is substantially done by crushing then separating the iron out via electromagnetism, which implies cheap fuel to generate electricity. The nexus of gas and magnetite ore bodies in a thinly populated geography creates the potential for the preprocessing to be done on site, and thus allowing steel mills in more densely populated areas to lower pollution where it counts. This could be an interesting development in years to come. Formosa Plastics has invested too much in Iron Bridge to simply walk away, but it can hang about and do nothing for a few years, and it may well have to walk away, anyhow.