Ann: Presentation to CLSA Investors Forum , page-4

"Seems that if IO prices stay to low chinese IO industry will collapse."

Gardie,

In the West the capitalist system will allow the sector to collapse ie, IO sector in Oz. In China, just like their political system, companies are run semi-Govermental agencies so the action of 'subsidy' is what keep things afloat when it gets tough.

Would you say the country as a whole has more to gain from a low IO price since the majority of the product is imported? Likewise thermal/coking coal. BHP/Xstrata has been in this coal game long enough and they are slashing jobs when clearly their balance sheet and cash reserve can withstand if they think is a short term weakness in the commodity.

Here lies the difference between the 3 major IO producers.