Iron Ore Price, page-1299

Accaeric,

"Is your post on 6 March still applicable?

"micky78, post: 14874352, member: 109331"
IMHO I think FMG is lower risk.

FMG is lower cost with railway.

Further, FMG can easily sell their railway for multi-billion if they need to.

Further, I'm sure a lot of Chinese steel mills would love to take placement in FMG because they produce 160mtpa." "

Absolutely, I was referring to AGO vs FMG. FMG has railway to sell. The railway and port should worth several billions and can buy some time (may be a few years) and hoping iron price will recover.

However, selling railway and port will drive cost up as new owner will want to charge toll. It is only to buy some time.

AGO can only sell a few old truck tyres to sell.

However, my BEST proposal to FMG is (as I posted before).... convert FMG into utility infrastructure and royalties company. That is, sell entire FMG mine to repay most of debt but keep railway, port and collect small royalties like Hancock Prosp with Rio Tinto.

Let Chinese own FMG mine and subsidise mine. Instead subsidizing Chinese mine at cost $100/t, subsidizing FMG's mine (sell to Chinese) at $52/t (FMG's all-in-cost).

Than Chinese can expand from 166mtpa to 500mtpa... TURN BHP & RIO ships back to Australia and say to them "we don't need your ore anymore... thank you for your business". This will collapse BHP & Rio. Chinese keep FMG mine (their own) and Vale total 1,000mtpa (that's total seaborn ore import for China) and their domestic mines.

FMG gets $5-10/t (for using their railway, port and royality) X 500mtpa = $2.5-5 Billion profit per year with minimum debt.

Toll and royalties are guaranteed. Gina is getting $2/t royalty from Rio regardless of price of iron.

Just IMHO.