The Ukraine war has really made most businesses reconsider their...

The Ukraine war has really made most businesses reconsider their offshore supply chain and sales and has I am sure influenced China’s decision making process regarding a scenario of China annexing Taiwan.

For one China is a key supplier of pharmaceuticals and electronics which like gas from Russia will be a big weapon. Conversely, China relies heavily on importing raw materials and exporting goods around the world to fuel its growth and keep its population “content”. It will be weighing up the risks and rewards but will be in no doubt, as a result of Ukraine, that the West will react. On top of that they are still struggling with COVID and so, I suspect that all the rhetoric at the moment will carry on for some time.

I think if Australia could get into producing Green Steel at a reasonable cost, the west, along with China, would be queuing up to take it off our hands. The problem is that our labour is too expensive compared to China and others. If companies like FMG through their Future Industries division can figure out how to do this, then Australia will transform itself from being a raw material supplier to a secondary industries based economy. MGT, HIO and IRD will all benefit from that.