Oakajee - the key to PDYFor anyone interested, the Commonwealth...

Oakajee - the key to PDY

For anyone interested, the Commonwealth Government issued a Media Release during the week, via the Infrastructure and Regional Development department.

I urge all PDY holders, and potential holders, to have a look at the release.

Infrastructure for the 21st Century
Media Release
BUDGET INFRA 07/2014
13 May 2014

Click here to view the Media Release

Whilst the entire release will be of interests to Westies, Padbury holders might like to scroll down.

The Oakajee Port is clearly on the Gov't "to do list", and $339M dollars has been budgeted for initial development.

IMO, with the recent fiasco, PDY management have managed to create a "credibility deficit", so I believe any future success of Padbury's share price will tend to rely more on official Government announcements such as these, rather than any announcements that PDY may come out with.

Obviously an element of trust needs to regained, before PDY announcements can be trusted in isolation, IMO. This is not rocket science.

Rest assured, and irrespective of what opinion you may have of current management (something I'm not interested in BTW - has been done to death), rest assured Oakajee is on the planning horizon.

Future of Magnetite?

It's no secret that east coast China has a major pollution problem.

Despite the ill-informed doom and gloom posting surrounding magnetite, everybody dabbling in the iron ore sector should be fully aware that the Chinese Government has initiated a Steel Industry "clean up", by shutting down (primarily by restricting finances) to the inefficient and high polluting steel mills.

Did you know?

Every tonne of high concentrate magnetite processed into steel equates to a (net) reduction of 108kg of CO2.

Info graphic source

Few can argue magnetite is not becoming an increasingly attractive proposition for China. This is also not rocket science.

IMO, it is not unrealistic to even consider the pollution problem in China may become so bad, that Magnetite may eventually attract a premium in price, and that DSO becomes the "dirty" poor brother.

Declaration: I have been to China almost a dozen times since 2009 with work, a week at a time. (Beijing, Nanshan, Chengdu, ShenZhen, GuanZhou, Haikou, and the lovely Sanya). I have seen first hand the increasing pollution from ongoing massive development, year on year.

If you haven't been to China in recent years with a year or two in between, and seen what is actually going on there, then IMO it will be difficult for you to fully appreciate this. Despite the media beat ups of doom and gloom.

If you've never been to China, then IMO, it's difficult to make an informed comment. My only suggestion is: go! It's an eye opener. I digress.

This "clean ore" premium could be as simple as higher spot prices, or most likely (IMO), money invested in Australian infrastructure to guarantee the long term supply of magnetite ore.

Rest assured, the Chinese Govoernment have a vested long term interest in ensuring magnetite reaches Chinese steel mills.

IMO, anyone investing in the Mid West hopefuls such as PDY (just 1 of 21) should have a long term view, because trying to make a "quick buck" may result in disappointment.

I'll be watching any Commonwealth and WA Government press releases regarding Oakajee with increasing interest, and will tend to place less emphasis on individual company announcements.

Whether PDY management are instrumental in having a key role in Oakajee's development directly, or through it's fully owned subsidiary MWI, or whether we ride on the Government's coat tails, who honestly cares.