iron ore prices will plummet when China develops its billions of tonne deposits of magnetite iron in WA. Clive Palmer who controls 80 billion tonnes will be richest person in Ozland. sure the cost of production of magnetite is higher than BHP and RIO's hametite, but its a lot lower than what BHP, RIO and Vale are currently demanding.
China will use its WA iron ore mines strategically to push down the price of iron ore close to the cost of their own production. China will bring in (in fact have announced their intention to do this), their own labour to mine the ore and develop the mines etc thereby putting further downward pressure on BHP and RIO unless they in turn also import cheap labour from overseas.
I think both BHP and RIO shareholders would benefit from a merger, but RIO is asking at least 50% of the new entity and this is absurd.
BHP Price at posting:
0.0¢ Sentiment: ST Sell Disclosure: Not Held
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