Thats all right mate, but you have to be amazed how much drilling they have planned for this year and how quickly they going to JORC a deposit. If you at what Rio think of Coal in Mongolia it starts to build a picture why I am so bullish on coal over there
Rio Tinto warns on cheap Mongolian coal
Rio Tinto has warned that cheap coal from Mongolia as well as congestion at the Port of Newcastle in NSW could undermine export markets for the Australian commodity.
Rio Tinto chief executive Tom Albanese said he knew the leader of an energy company who likened opportunities in Mongolia to a ??religious experience??.
??Coal from Mongolia to China is happening. It is expanding, probably doubling every two years,?? Mr Albanese told an investors? conference in Sydney on Monday.
??Will that coal get to the seaborne markets? I suspect it will.
??Will it get to the seaborne markets at a lower delivered cost than Australian coal? I suspect it will too,?? he said.
Mr Albanese said problems at the world?s biggest coal port, Newcastle, were unhelpful.
He said Rio Tinto?s Australian coal production was not at capacity purely because of logistical reasons in getting the coal exported.
??We should remind ourselves that Australia is not the only source of supply for the Asian seaborne market, so if the coal chain does not pick up, others will find their way to that market,?? he said.
Mr Albanese said Rio Tinto was leading the way in moving towards a longer-term take-or-pay arrangement at the Newcastle port facility.
Newcastle?s coal port has been plagued by congestion over the past 20 years, causing headaches for exporters.
Mr Albanese said his company was continuing to look to invest in Mongolia, where coal coal horizons were 300 metres or more in thickness.
??We have coal interests through our stake in Ivanhoe (Australia Ltd) but we also have coal interests on our own in Mongolia via Rio Tinto explorations,?? he said.
AAP
The other biggest reason is production costs which are 9 to 10 dollars for raw coal and 15 dollars for the finished product. Also transportation cost are .002 per tonne per Kilometre.
Also with BHP pushing for Coking coal at US $225 per tonne the money to be made with low production costs low transport costs sees Mongolia way ahead. I think as this ramps up you will see all the majors wanting a stake in this area. A lot don't now about the quality and the amount of coal in Mongolia and the bonus of cheap production and low transportation costs. I think thats one of many reasons why any amount that has bee put out has been snapped up.
HUN Price at posting:
42.5¢ Sentiment: Buy Disclosure: Held
