Gove certainly has good bauxite close to port but their processing/refinery has gone from one of the cheapest to quite expensive.
Gove use oil as a heating source, others use Gas. Over recent years Gove has lost some of its advantage as oil prices rise and the costs of an isolated refinery climb and kill off the savings of virtually nil transport.
In 2008 Worsley was ranked 2nd most efficient (cheapest producer)in the world, Pinjarra 4th, Wagerup 10th, Yarwun 17th, QAL 21st, Kwinana 27th and Gove 39th (of the 69 ranked). At the time maybe only the top 10 were making money or breaking even.
Prior to this Gove was always in the top few positions. They have lost their advantage - if they went to coal as a heating source they would regain some cost savings - but I can't see that ever getting approval.
The problem with BAU is that while their resources are collectively OK, individually in my opinion they are too scattered. Having said that I hold and this could be a multibagger if (and when) they find a single location with the mother load and/or some other resource that's maybe a bit more popular.
All just my thoughts
Newbie Thomas
BAU Price at posting:
11.5¢ Sentiment: Hold Disclosure: Held
