Trawling the net for iron ore related stories and found an HSBC estimate for Chinese iron ore production as sitting at $130 a tonne (as most of it is low grade). This pretty much puts a floor under the long term price of iron ore so long as they are still using it. Vale hold an estimate for the next five years as $150 a tonne. No mention of the pct iron in the ore or if it was lump or fines. BTW yet to find an answer to the question on what the price difference is between 63% or or 58% ore - obviously of some significance if it was mentioned in the latest IOH news.
Anyway $150 a tonne is a pretty good number if IOH can get to production (or incentive for FMG to go as fast as possible), but not necessarily going to be quite as great if the US dollar dives down in value. The reason for the estimate was that not all expansions plans will get done when they are planned for (as we are seeing in Australia already).
Holding my shares tight while all this silly business gets sorted out around the world - IOH have no debt, and it is all upside from here (but if someone is willing to sell their shares for a dollar I will happily oblige them).
IOH Price at posting:
$1.15 Sentiment: Buy Disclosure: Held
