My thoughts on chinese 'crack down' on iron ore. They won't be able to continue reducing steel production for a long time. China is grossly neck deep in debt and the only way for their economy to survive is through continuing construction and production and they need iron ore for that.
What they are doing now is a 'game' to reduce iron ore to a manageable or profitable price by saying it's to reduce emissions. Loads of rubbish, they need iron ore but at a lower price. The price is over inflated which MGT addressed in PFS by reducing the price to $110 for 62% (we have 68% grade higher in price).
Again, Iron ore price might be going down but not for long, it's economically unsustainable for China to lower their demand for a protracted period of time.
The solution for China's economic loss from Covid outbreaks, floods, debts is none other than IRON ORE.
I believe MGT is set up well for this with a huge reserve and low strip iron. In the end there will always be demand for Iron Ore even if wars break. Iron will actually be like 'oil' in the future where conflicts would arise to control this resource. I would even bet that China will actually invest a huge portion of that $500 millions costs with some sort of agreement attached to secure supply of iron ore.
Unless WW3 breaks, after a couple hundreds of years Australia will be an Agricultural power house to slowly replace mining. Note that China's food production and water allocation is badly mismanaged.
Good possibility MGT still be around by the way (giving dividends) as their mining life estimate of 100 years is only from 400mil tonnes of ore, they have 3.9bil tonnes.
So the point is, MGT will be a profitable company paying dividend to your great great grandchildren. Iron ore will always be on demand even if wars break. China will always want Australian iron ore.
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