Hi Gindaldan, Yeah, I’ve said the same as you re. Karara product...

Hi Gindaldan,

Yeah, I’ve said the same as you re. Karara product being the cheapest for Ansteel. No dispute from me on that. And I agree, magnetite has been in use for a long time.

But there’s a big difference in what might be cheap for Ansteel and the same being acceptable for GBG shareholders as far as their share of the GBG profit. A low IO price will increase Ansteel’s profit but in contrast will damage GBG’s.

I laughed when I read GJ’s comments that Ansteels interests are now aligned with GBG shareholders. That’s nonsense. Ansteel took a stake to lower further still, their input price for IO. They didn’t buy a stake because they think GBG will be an ASX top 20.

I have to disagree with you on quoting the 2007 IO prices used in the BFS. Expecting them to be just as relevant now as they were when the BFS was released is probably mistaken to some degree. Regardless of the mining downturn, labour is still more expensive now, and materials like steel, rail, wagons, building materials etc. are still at peak prices and above the levels of 2007. Costs are still higher.
And any push, like that from Gina Reinhart now, to bring in cheap Chinese labour, is shot in this climate.

To see how much things have changed have a look at the forecasts and discounts applied in the NPV in the BFS, compared to those used in the Independent’s report.
The discount in the IE report is 3-4 greater from memory than that used in the BFS.
IE NPV is a fraction of GBG’s efforts in the BFS.
So, can the 2007 BFS still be relied upon as completely relevant- I think it’s not.
Also brings into question the motives used in applying such discounts- in both cases!

Nice to have a decent thread going again.