SPH could just sit back, conserve cash and concentrate on a deal rather than drilling Askaf. This would imply they are looking beyond the current bidding process for Guelb el Aouj to finance further projects.
Don't think soverign risk or finance are pressing issues given sophistication and size of bidders, take a look at latest SNIM deal announced on Monday: "SNC-Lavalin Inc. will provide engineering, procurement and construction management services for a $630 million US iron ore concentrator project in Mauritania. Construction is scheduled to begin in 2010 with an expected completion date in early 2013, the Montreal-based company said Monday...The Guelb II iron ore project is adjacent to SNIM's existing iron ore operations in the region and is expected to contribute an additional four million tonnes of iron ore concentrate annually. SNIM produced close to 11 million tonnes of iron ore products in 2008..."
If SNC-Lavalin are happy operating in Mauritania then why not Minmetals, Mittal, Xstrata, Indians, etc, etc, etc.
So what's the hold-up? IMO very tough negotiations and a certain amount of brinkmanship probably taking place 'under the covers' at the moment. With 3 projects there are plenty of scenarios to discuss and sufficiently high stakes on both sides preventing the usual 'leaks'.
Question is, does Burns know just how far to push the bargaining process to deliver a great result?
Hope we all see $3.40 (or over) again in the coming months.... not inconceivable.
Cheers
SPH Price at posting:
96.5¢ Sentiment: Buy Disclosure: Held
