Richyoung, Important points that stand out are the following -
* Ansteel's new plant will use the supply from Karara to gradually replace the more expensive supply they currently use from Vale.
* The new plant is expected to eventually produce just over 30% of Ansteel's total production meaning a huge supply of concentrate and pellets will be needed from Karara and others.
* Karara supply "should" be far cheaper for Ansteel than buying from other sources.
* The key for GBG shareholders though, is still the IO price and whether it can help maintain magnetite concentrate as an economical and profitable competitor.
* Ansteel's 50% of Karara supply will always remain very competitive, from Ansteel's perspective.
* But the returns from GBG's 50% may not please shareholders as much if the IO price deteriorates markedly.
* Current expectations are for a drop of around 20% but I've seen forecasts as low as minus 60%.
GBG Price at posting:
56.0¢ Sentiment: Buy Disclosure: Held