Richyoung,Important points that stand out are the following -*...

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%.