Hi DonedealMy question on the port is critical to any company...

Hi Donedeal

My question on the port is critical to any company being a successful Iron Ore Producer.

I am investing strongly on a number of IO hopefulls in the West African regions including LEG. My weighting of investments will be heavily biased towards those with good infrastucture (or good strong plans to built infrastructure.) LEG is a long way from this but it could come. I don't hold LEG yet as I am still doing my research on them. I won't miss the boat as there is a long way to go.

As you said see you in five years.

Iron ore is primarily a logistics and infrastructure business. It is all about trucks, rail, ports, terminals and ships. West Africa should be the next great iron ore province in the world, but to get there will need infrastucture to be built.

It is apparent that the West African region has abundant in high quality Iron Ore. It is in Nigeria, Cameroon, Gabon, Congo and I suspect other neighbors. There is numerous deposits. Iron Ore quantity and quality is not a problem, but it is useless if it can't be economically delivered to a customer either on your ship in his port or his ship in your port. LEG should not have a problem finding good quality Iron Ore on it's propect areas. I am more interested in infrastucture plans than Iron deposits as I see IO as a given.

Building infrastructure from scratch in remote and inhospitable areas is a challenge on it's own. Cameroon is most heavy jungle and has a very high rainfall. There is a government in power that is keen to promote the IO projects, but you have to question their ability to assist in the development. West African countries have a appalling record of managing development. Cameroon is better than most of it's neighbors. I do worry about the removal of a president that has been in power for 28 years.

I lived in Port Hedland from 1962 to 1980 and consequently saw what was needed to get the Iron Ore business going. The Pilbara before the iron ore started presented similar issues that we will see in West Africa. Infrastucture is the name of the game, not who has the best or most IO. Look at the Big IO producers, BHP Rio, Vale, FMG. They all own the infrastructure and control the Logistics all the way from Mine to Customer. To be succesfull that is what is needed. That is aso why SDL shot up when the MOU with the chinese for infrastucture was announced.

We just need to be on the right horse(s) when the race is up and running. Many horses will not finish, but the rewards for picking the right horses will be great.
Not sure yet if LEG is a good horse but will have something on it in the early stages.

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