I dont know about lithium but I do know they have a very high...

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13/06/18

15:37

Post #: 33684568
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Originally posted by defabs ↑

I did send the below to BHP. It may be in their interests to get a seat at the poker table.

With regards to the operational update released on 19/04/18, I note that 100% of capacity at the port will be utilised during FY19 for the iron ore operations.

"On 16 February 2018, BHP received regulatory approval to increase capacity at its Port Hedland operations to 290 Mtpa (100 per cent basis) and expects to reach this run rate by the end of the 2019 financial year."

Given at the moment, AGO is currently subject to a takeover from MIN and both FMG and Hancock have 20% stakes in the company, would it not be in BHP's interests to:

a) Preserve profit by not allowing one of MIN, FMG or Hancock to increase output to 44M tonnes per year of low grade ore. This may have a detrimental effect on the iron ore price for all grades.

b) Shore up port capacity given the run rate will be at capacity in 2019 without any further investment or acquisition of other port interests. A potential acquisition in AGO would ensure any decision made in the future to increase supply would lessen the possibility of supply chain disruptions.

c) It would also provide diversification into the lithium sector for BHP.

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I dont know about lithium but I do know they have a very high interest in copper, the forecast for copper in the next 20 years is rapidly declining consider it is one of the main component for all things electronic not just cars but solar technology, their vision has always been something like 10-20 years ahead.

AGO Price at posting: 4.5¢ Sentiment: Hold Disclosure: Held
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0 Great analysis

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