IMO A$832B will take some time to flow through. Money has been allocated, but then project plans need to be drafted, approvals worked out, architectural drawings worked up, rail corridors worked out, plans worked out to move communities, etc. etc. etc. if you get my drift. Chinese will work quickly, but they are also simultaneously trying to reduce emissions among other issues.
Not trying to be combative. Just relaying facts that have been passed to be by people I know involved in the industry on the ground in the Pilbara and working for the majors. Read into it what you like. Lot of stackers and reclaimers parked up. Lot of ships out in the harbour. Rio told meeting today that production cuts in the Pilbara would be fifteen percent in 2009.
My belief is that there is currently a lag between the meltdown and the flow-through to the real economy. Fifteen percent production cuts has got to mean significant impact obviously on employment here in WA for starters. Already seeing big impacts on contractors working for majors. Junior sector has been smashed as you know.
But if you're right, $%^& let's buy a lolly pop shop. Go ya halves.
Have appreciated feedback of you and others from AGM.
My belief is that if a deal is to be done for UMC it will be with the Chinese or an Asian steel mill through an equity/ off-take arrangement: perhaps BHP. Say that without any inside knowledge whatsoever.
Find it hard to see Rio doing it. BHP maybe. See them investing through the cycle.
BUSH
UMC Price at posting:
70.0¢ Sentiment: Hold Disclosure: Held
