rio and the doir, page-4

I think it’s easy to be critical of RIO’s apparent “non-use” of Shovelanna. But big mining companies are thinking way ahead of our simple logic. RIO needs to ensure its future so it has to hold tenements for the future. You can’t just run a mine down and then go looking for more the next day. Leases need to be held for 10-20 years. They mine each tenement to optimize it. If mining was a matter of “use it” now the market would be a flood with ore and the value of the resource and hence the profits would be considerably reduced. The WA govt won’t want that. There is merit in long term holding of tenements, especially where the company can show progressive optimisation. All the big miners do, and have a fist full of “hold for future use” tenements. Like WMC mining companies also release uneconomic leases that fall below their cut-off criteria (usually if they find something better for the basket). The decision process involves far more than “you dropped it, I got it”.
UP
PS I hold CAZ