profit on fms mining?, page-6

Seanl,
In the alliance each party has contracted to finance and do agreed work.( it is not a JV or Corner stone investment because non of the three is joining anyone else tp finance the alliance) FMS has to finance the FMS mine which they would have had to do. This cr is to get them started. FMS needs about 1bn and the mgt stated in anns that they would get the moneys in various ways. That’s why mgt went to HK and will be going to all the other expos) Todd Corp want to get into freight and are financing /building it they needed extra tonnage and signed up FMS. RTA a developing there mine and using Todd rail. Todd Corp has some 19% of RTA shares so they are fairly close.
AT 20mtpa life of mine for FMS is about 40years. FMS will do what everyone else is doing and ramp up production quickly. At the port there is space for expansion and no mention of bidding for it or having to pay. FMS being a foundation member would get priority one would think. ToddCorp would like more tonnage because that’s there business and if it hasn’t been discussed I’m shore it’s understood by all.
If and/or when the price of I/O falls it’s generally agreed in the industry that steel works will be more attracted to buying high grade ore which FMS has a lot of. Vale has built souper freighters to reduce shipping cost, but they don’t fit in Chinese ports, so they have to ship to Philippines and transfer to Chinese freighters There has been no mention of how low the price or I/O needs to go before Vale finds it uneconomical (Vale ore is lower grade to FMS, DSO).
It’s like buying fillet steak at the price of an inferior cut. FMS is important to Todd Corp because of the total tonnage it has to move and Todd Corp can get the money back on it’s investment.
IMO this deal is a better one for FMS than if they had have gone with FMG. FMG has a precedent if getting half of the clients ore to ship the remainder, then there would have been the problem of port allocation and cost for it.
With regard to rail approvals. Rail has been a problem for the WA Gov’t for a long time and this Alliance will resolve it without court orders or ongoing litigations. It also seems ridiculous that a Gov’t dependent on mining revenue who has given all the approvals to mine an ore is not going to approve the shipping of same. Three co. important and well verst in getting gov’t approvals will be lobbying the Gov’t with a solution rather than one.
Good luck to all SH.
I’d love to go to my first $1 party, organic eggs and good quality whisky for the nog and a variety of donuts.
Cheers