Arrium to be taken over, page-2

The consideration I have is.

If the FEDERAL government wished to invest IN AUSTRALIAN STEEL for BOTH BLUESCOPE AND ARRIUM and in doing so making Whyalla more profitable and sustainable leaving a permanent legacy,other Sth Australians businesses could benefit from,it could pay for or ENSURE the harbour access is dredged to bring Capes right in and save a fortune in ARI's IO trans-shipment costs,especially to Bluescope Steel,which is shipped in a 50KT capacity boat instead of a cheaper Cape.It would make the coal for Whyalla cheaper to import by ship bringing down steel costs and the IO shipped out to Bluescope in Port Kembla cheaper for them to ship in larger vessels.Irrespective of a steel mill staying or going that would be the greatest permanent benefit for the Whyalla community and ensure increased and future capacity for other exports and employment for any peninsula commodity grain or ore and CREATE EMPLOYMENT as a result.

Too many vested interests blowing too much wind to actually do something constructive here.
I just hope someone wishing to make a constructive move and win an election maybe thinks about this simple option SERIOUSLY.
The Govt could even get it back as a levy on all tons Caped in/out at the rate of half the trans-shipment costs savings,until its INFRASTRUCTURE COST is repaid.

Is anyone listening????????????

DYOR + DYODD Whyalla's IO is cheap enough feed for the blast furnace,but as pointed out transport costs are supposedly a killer.Bollocks,BHP,RIO,FORTESCUE amongst many global IO others would love to only have to train 60-70km to an OWNED PORT as ARI does for export,instead of the 6-700km to a port they don't own and pay port fees.Most steel mills would love to have their IO pumped to site for next to nix at cost,instead of paying a hefty freight bill to get it there as well as a variable market price.
Who's cocked up an easily profitable business by not doing or putting some simple things right????????
BSL's NZ steels SMALL 650KT steel plant for years has been making the money their BSL's Port Kembla's couldn't for those very same reasons.I/O pumped into the site at cost.It's 1/3rd the size of Whyalla and a more complex steel making process,costs more to maintain and run than a blast furnace.
Ask the GOVT's Unions,ARI management,why its never been sorted when other South Australian miners for one are Pushing for a deep water port access and its potentially readily available with a bit of co-ordination and Whyalla has TWO rail loading facilities under utilised.
One on Care and Maintenance-NOW
Talk about job creation, Port fees and royalty taxes going begging in STH AUSTRALIA along with FEDERAL TAXES on incomes generated.
All for the cost of a bit of dredging that adds $50m a year to shipping costs,or to put it in perspective,could have cost around $500m over the last 10 years at 9Mt a year.
ARI by rights should be cleaning up BSL on costs and profits given its natural steel making advantages and its structural steel market-which is more valuable than just flat sheet made in a Blast furnace in Port Kembla and made as a straight commodity product.



1Moly-cop Australia along with Donhand Australia now have the grinding media market to themselves.
therefore steel demand for ARC furnaces supplying same should be UP.
Say another 25kt sold into this market. instead of it being stagnant sales.
$25m+ stable income of say $200m a year =$225m less Capital $60m =$165m free cash generated + America's growth of 7% or $14m = $179 free cash.

2/Steel income should be up 50% rise in global steel prices have just arrived and customers on the receiving end will be paying 50% more.That should be making ARC furnaces HIGHLY PROFITABLE.
5% increase in sales is 50kt worth in 6 months and $50m we have always been told and seen.
so last years $88m excluding Whyalla plus another $50m for starters.
A rise from $350 a ton for steel to around $500 a ton adds across the board on 1.2MT another $150m to sales ex Whyalla and somewhere in between for the ARC furnaces on 800KT plus.
Whyalla should be approaching marginal (temporary breakeven)

3/I/O is back to being income producing.$15-20 a ton or $135m-$180m a year.Less Capital of say $6 a ton and SI trailers $30m at a guess i.e. less $90m. Breakeven to +$40-$90m if it stays there.