equity & offtake

Hi SDL'ers, it would appear 1 question may possibly shed some light as to why (almost 2 month after the NDRC came out with their chest-beating strategic IO mission statement) there is still no announcement.

Firstly, it appears who will be rewarded the bankable off take contracts securely funding the project (is determined by ownership of the assets). Refer to the excerpt under the section "Equity & Offtake" from the half yearly report.

…..Other parties such as steel mills, EPC and mine plant groups will also have the opportunity to take an equity position in the mine or the total Project with ASSOCIATED offtake, at terms to be agreed….

Now bear in mind, the EPC will be awarded EXCLUSIVELY to either a Chinese SOE or the European company.

For now, let’s not use the real-world asset equity sale - off take example of 35MTA Jimblebar (where 2 Japanese commodity traders Itochu and Mitsui paid $1.5 Billion for a mere 15% stake last year. Nor do we pay any attention to the Sundance ASX released EV of $11 Billion (which ties back to the cash flow generating abilities of the resource) arrived at after a year of due diligence.

Question is if European and/or Indian and/or Japanese-Korean interests bid for the assets in part (say in combination 70% total of Mbalam-Nabeba at a prevailing commercial rate) at $ X billions times 70%. Now 70% of 35MTA is not a lot (considering FMG will soon produce 155MTA).

How does anybody here think the Chinese would respond (now we know the NDRC is allocation special funding for foreign IO asset acquisition for supply security and “speaking rights” – inferring maximum off take) ?