Ann: MOU for South Korean Downstream Processing Facility, page-100

Fully agree. In my mind its a no brainer that if this JV goes ahead we are going to be sold out of stage 2 products and NEED a stage 3 if we want to diversify our books.
To be honest, I would understand managements thinking if they decided to sit at stage 2 for a bit first to see how they operate and mange a 5MTpa biz. if the operations guys are of the caliber to manage it smoothly then its 12 months to stage 3.
In the mean time i would make sure that ALL of the plans are flexible enough (front heavy) to allow cheaper back end and quick expansions to stage 3 to capture the market in time.
At the end of the day, yes having an efficient and low cost of production is important BUT its more important to capture market share in a heated market then look at efficiencies to squeeze margins when the market starts to turn to capture all the extra margins. Having scale and market share will allow for efficiencies, when ever you want to look at it.
Look at the likes of Vale, BHP, RIO and FMG during the IO booms for example.
The only guys left naked when the tides turned were those smaller 10-15mt pa IO players who closed or were close to closure (ATLAS being one of them). My only concern would be Ken being too careful (from previous experience) and not keen enough to use the expand first and efficiencies later strategy.
I hope I am wrong though. But one thing i am sure of is Ken really needs to considering hiring me.