Giulio never really had a chance too. The problem was that we had signed away the rights to the iron ore to Noble. Once Noble (Chinese) had the rights to the Ore SDL produced, that meant that SDL had lost their biggest bargaining chip. However this was all done with the expectation that China were going to supply the funds. The next point if you're BHP, why would you spend $5+ billion Aus to develop an IO mine in Africa for 50 million tonnes PA, when you can spend 500 million and expand infra structure and the port facilities and increase the tonnage leaving Port Headland from 300 tpa to 350 tpa? You already have the rail and port, you already have the mines, you just need to make it all more efficient. You don't have to deal with corrupt governments, Sovereign risk is negligible (Look what happened when labor tried to introduce the super profits tax). you don't have to start from scratch and the lead in time to 50mtpa is much shorter. Face it RIO & BHP are making money hand over fist right now. At these prices they just want to get as much IO out of WA and into China as possible because anything that's there in 4 years time will probably be worth much less than half of what it is now. BHP knows that, Rio knows that and China knows that. Giulio however would be the perfect person to take over the "new project", so I'm sure his CV is ready to go, if it hasn't gone to China already.
SDL Price at posting:
0.6¢ Sentiment: None Disclosure: Held
