Hi GreenTint,Yes,we do see things differently.I see numerous Ore...

Hi GreenTint,

Yes,we do see things differently.

I see numerous Ore sources with different cost structures.
Also i see around US$105-106 as the Current benchmark price.
Form this I discount the last discount to platts and then also around $10US for shipping.
This has varied between $8-14 for Cape size vessels.

Not knocking ARI,for they are doing well in this environment,given the prices and have optionality other producers don't,including dropping back to supplying 8-9MT of only higher grade ore.

Ore sources that i see are
63% Southern Iron 3.8MT/yr
59%+ beneficated fines 2?MT/yr
59-65%% magnetite beneficated fines.+ 400kt/PA ongoing
60% MBR ore fines and lump.
53-55% MBR site stockpiles plus low grade mined ore being blended into higher grade ore to save processing costs.This blending may cease as prices fall,dropping 1.5MT of volume,altering IO costs upward unfortunately.
Return to the mining site at the start of mining in Sth Australia,which has additional royalties payable will push up cost in 2015.

It is the blend as you point out that makes the mix.Last QTLY the grade was lower and costs dropped also due to less Southern Iron ore in the mix.Unless overall tons increase from there,then its IO cost will remain marginal,although still profitable in this environment from Southern Iron.

regards,

Fitnfam

DYOR+DYODD I have a High regard for ARI management