To a certain extent the issues surrounding the Mount Isa Smelter are involved and certain people want to put as much squeeze on CDU as possible.
In the long run the asset should be worth more in CDU's hand. Instead of sharing costs the others involved will have to pay a fee for service.
The others will then over time end up paying for this asset.
Someone on here said XStrata (or is it Glencore) found marketing magnetite (IO) too hard. Well with this asset in hand CDU may end up taking it off their hand and build a market out of Townsville.
Not sure of the size of ships that use Townsville but to move I.O. one would, I think be talking of 150 thousand tonnes per load. I don't think XStrata wanted the infrastructure to move loads like that. The 64 dollar question is can CDU do it and if they can, can they also move XStrata's magnetite rather than have them leaving it in their waste dump. I see a situation of CDU being the mover of XStrata's magnetite. Without being a part owner of the infrastructure puts them in an unfavourable situation for low cost high volume traffic.
CDU Price at posting:
$2.10 Sentiment: Buy Disclosure: Held
