Not a wool thread. Looking at iron ore
"The world’s largest untapped ore reserve in Guinea’s Simandou is intensifying preparations for production. The project could deliver 5 million tons starting in 2025 before ramping up steadily to 90 million tons a year in 2028, according to Macquarie Group Ltd.
Nameplate capacity is 120 million tons, a level that could be reached in five to seven years, said Liz Gao, a senior analyst at consultancy CRU Group. By that time, “the market will rebalance, with high-cost producers leaving the market to make room for these new volumes from Simandou,” she said.
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"Rio Tinto, the world’s biggest supplier, BHP and Fortescue Ltd. also dominate the lower end of the cost curve, churning out ore at between $18 and $24 a ton, figures that don’t include processing and transportation. Brazil’s Vale SA, the world’s second-largest iron ore miner, produces at $21 a ton."
"Simandou, which is divided into northern and southern blocks, would be comparable to the cheapest supply currently available. By the end of the decade, the southern part of the project is likely to be producing at $20 a ton, and the north at $35 a ton, according to Commonwealth Bank of Australia analyst Vivek Dhar, who pegs the long-term iron ore price at just $68 a ton."
If Vivek is correct. The profit hit for most Australia miners is still over the cost of extraction. Shipping cost is distance item.
Pilbara to China is 4000 nm plus a bit!
Guinea to China about 13500 which is three times the distance
South America Brasil to China is even further perhaps
Used Sea route & distance - ports.com
Some variability in options of the route ships take of course! This geographical advantage to Australia and the current main user/customers of iron ore may change as technology as low/no carbon steel brings other changes to us as well.
It was said 200 ish years ago we rode on a "Sheeps Back" Iron Ore employment, taxes and dividends for many of us as well as in all of our superannuation funds is worth considering.
I am not predicting the long or short term iron ore price! I do know it impacts on all of us.
AFR and other sources used in above Iron ore prices: China’s demand remains huge but analysts warn high prices aren’t sustainable and will fall closer to $US100 a tonne (copyright link)
and Iron ore’s $100 floor at risk of collapse from jump in supply (msn.com)
