If there will be another FMG it will probably be a sector that is currently or recently been over supplied leading to lack of incentive to explore and develop mine or even mothballed mines. So over supply becomes undersupply. To be the next FMG in iron ore you need to be ready to ship large quantities sooner rather than later. So would already be known.
If FMG were just starting out now they would not be nearly as successful as they have been. Timing is critical in cyclical commodities. They nailed the timing beautifully even though a little earlier start up would have been optimum.
UMC has the potential advantage of being economic even through weaker economic conditions due to lower capex and op costs and quality rather than mass lower grade quantities that requires vast amounts of capital raising, higher costs and lower sale prices. What was achievable in the not so distant past will be close to impossible now.
So my call is there will never be another FMG in iron ore sector in Australia.
UMC Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Not Held
