Thought i would start a new thread rather than pollute the iron...

Thought i would start a new thread rather than pollute the iron ore price thread with other content or tax talk.

Not everyone will agree but if FMG are serious about diversification using more than just chump change on copper gold exploration locally and in south america then Vales epic disaster in Brazil has given them a short window of opportunity. This boost in the 58% index and share price will be short lived. Problems will be fixed and new tailings dams will be built. Production will come back on line in what is a well supplied market thanks to a decade plus of heavy investment. My argument followed on from my previous post (below) that FMG like RIO and BHP see large copper gold deposits as one of their only avenues to either diversify and or increase profits.

This window as I call it for FMG exits with their existing cash flow commodity overvalued in the short term and the potential acquisition commodity (copper) remaining in a depressed state. This favourable ratio will change and may never be as good for FMG to use script and or debt in the medium term to diversify. I fully expect copper to be over $4/lb in early 2020s and the 58% index to be back on struggle street with a wide margin to higher grade products. So time is now, getting busy in the 2020s when this ratio is not as favourable is going to look pretty silly. 


"FMG pushing diversification imo is firmly in the same bind as both RIO and BHP with extremely limited options in terms of commodity. All three have gone as far as they can in iron ore without spending serious money on upgrading concentrate grades or magnetite expansions. The transferable skill set for iron is coal which is now being pushed aside, so that’s out. Next big market projects involve a change in technical risk being nickel oxide and aluminium. Lithium, zinc, potash, gold are also a mix of either too small or significant added technical risk. That leaves gas or big copper gold deposits. Gas for me a big leap for a pure mining company so that leaves copper gold. There are projects around that need $3-7B in capex, big numbers for any mining company. FMG picking up leases in SA and South America seems to be the first step in this direction."