Hi euro, Was pondering the Roy hill predicament the other day....

Hi euro,

Was pondering the Roy hill predicament the other day. Currently with a breakeven of 43 if they start tipping extra tonnes into the market they start losing money. It's not about market share for them cause they only have plans for 55mt flat out and they can't compete with the big boys anyway. I'm betting 55mt is a long long way away once the ore price has stablised. I'm thinking that Roy hills partners will only be seeking to be supplied the minimal contractual amount and Roy hill will only want to supply the bare minimum required. Anymore than that and they start losing money. I don't think they have any choice but to ration supply to avoid making a loss giving partners/investors the opportunity to purchase ore elsewhere for cheaper than can be supplied. It'll be interesting to see if the market allows Roy hill to supply more than 10mt in the near future. Vale is in the same position as Roy hill. S11d is not their saviour and will also have to ration supply.