prices rp, page-10

Thats an interesting point on the iron content Phil.

The only thing we have seen from the Moroccans is that they have a plan to ramp up production by 2015, requiring a planned investment of US $12 billion, and that they would like to maintain there dominance in the industry, relying on lower operating costs. Importantly, they need some or a lot of investment to come from foreign partners.

Over the next few years, Morocco can sell RP at a price much higher than the historical benchmark in order to generate the cashflows to internally fund as much of their 12 billion expansion plan as possible, or they can go back to selling it for a pittance as some suggest and be forced into relying on a larger degree of foreign investment (and therefore control) of the country's one and only major resource. Do you think they will choose the former or the latter?

Longer term, in order to squeeze out competitors (if in fact they do have this strategy) they could drop the price a lot due to their lower operating costs and new entrants would be in trouble. At that point, I think MAK must have the rail line, but I see this as being a long term scenario.

On the demand side, there will be a major shift in fertilizer demand created by the biofuel/biomass energy sectors, if you believe in higher oil prices long term, which I do.