cost of right to mine next 1 billion tonnes

Spot on Oscarwild.

For memory CITIC paid 200 million US dollars for the right to mine each 1 billion tranche of magnetite. This equates to 20 cents per tonne.

Given the 9% increase last year and the 65% - 71% Vale have achieved this year perhaps Palmer is seeking $300 million $US or more for the right to mine an additional 1 billion tonnes. That equates to 30 cents per tonne.

I guess they hoped by floating off the nickel and uranium assets this could help raise part of the capital required to buy the additional tonnes. But in a post correction environment this will probably not raise as much as they originally thought, if the float proceeds in the short term.

It will be interesting to see how the additional tranche is funded and the effect it may have on us minority holders.ie further equity raising.