[MEDIA] [ATTACH] It’s not getting any cheaper to develop mines....

It’s not getting any cheaper to develop mines. But [Wood Mac] question whether it is necessary for prices to rise and remain at US$15,000-20,000/tonne to incentivise development.

Conventional analysis of incentive prices works on the principle of the price required to incentivise the marginal greenfield project to meet requirement 10 years hence. Admittedly this analysis is fraught with uncertainty. What is the greenfield mine supply gap? What are the capital and operating costs? What are the required returns? How do you account for risk? And what assumptions are used for scrap availability and use?

[Wood Mac] allow for all these factors and arrive at a long-term price of ~US$3.30/lb real.

Cheers

These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.