Zacanzaz,Thanks. I assumed the capital intensity represented the...

Zacanzaz,
Thanks. I assumed the capital intensity represented the amount of capital expenditure required to get phase 1 up and running. I understood "phase 1" only covered the easily mineable (close to surface) DSO quality stuff that has a relatively low stripping ratio, and that that stuff amounted to 436m tonnes in total (the probable reserves). I know the two mines have a combined 4bn+ tonnes of resources, but the stuff that is known with less confidence is presumably the lower grade stuff with worse stripping ratios and which requires more expensive treatment (beneficiation), and is therefore the stuff that will be mined in phase 2.

Yes, I do have a problem comprehending the wisdom of high grading the best stuff off first (it is then not available for blending with lower grade stuff, and thus reduces the overall amount of saleable product that can be obtained over the entire life of the mine), but I presume when it is hard to get finance, you have to make compromises, and go for a stepped development (phase 1 first to supply the finance for phase 2?). I know with precious metals you are supposed to extract the high production cost stuff only when prices are high and leave the low cost stuff for when the price of the commodity is low (to get the maximum mine life) but I presume it is more complicated with a bulk commodity where you have such huge capex costs for different sorts of processing (phase 2 involves beneficiation? but phase 1 does not?). Sorry if I have too many misconceptions to deal with. All I have read is Hanlong could not secure $4bn of finance, and the question on my mind is why (assuming they are just a front for the Chinese Govt.). Is it that the mine just is not viable with the iron ore prices under $150 a tonne?