Hey some interesting thoughts and points.Rio and BHP are not...

Hey some interesting thoughts and points.

Rio and BHP are not halted. This is the just the spot market for IO being challenged by chinese on price. They do it every year on coal etc and then come to their senses. Its their way of trying to negotiate prices and sometimes it works to soften spot prices and sometimes it doesn't.

Rio and BHP both have l/term contracts for all commodities that are annually renewable but they also try to play the spot market if they can when its good. They both also have heavy jv and asset investments by chinese (have done for a v long time) so there is no issue as to their positions with chinese exporting of IO coal etc. Its all part of the game.

FMG no doubt have l/term contracts in place with chinese. Not sure if this is so much to their advantage at this time bc might have been secured some time ago in order to continue financing for speedy development rather than taking adv of current higher prices for IO. But just to start shipping in May will be a relief for Twiggy no doubt and then he can renegotiate after 6 or 12 mths if that was the deal.

FMG are proposing to sell 50% of their rail/shipping infrastructure to BHP. Think this may solve part of the 'sharing' infrastructure facilities issue for FMG. Not sure about Rio challenge will have to overturn precedent and this may occur if the law and facts of previous case can no longer be applied to the current issues of this case - on balance.

Cheers