Ann: Quarterly Production Report, page-6

Hi PB,

FMG has become a global cost leader now in the IO industry. It has a considerable buffer in terms of % compared to its peers.

While not being diversified can be seen as a negative and additional risk, it also has played into our hands. Some of its peers are devoting considerable management resources and costs towards projects north of China and far west South America that may be compromising shareholder returns. We know obviously of one peer that will have its hands tied for a few years yet and then there's additional inspection, maintenance, potential higher royalties to fund external inspections by government agencies. There is always the risk of what happened the other day as well, where a dam has been closed for a month at least to undergo an inspection.

yes, the steel industry is under a bit of pressure worldwide but what has not happened yet is fiscal stimulus programs where infrastructure is used as a tool to get economies going again. This is a big unknown and could really get demand going. Monetary policy is still likely to loosen rather than tighten in the foreseeable future.

FMG is in an unbelievable spot at the moment.