I agree that the GTL technology could be attractive enough for...

I agree that the GTL technology could be attractive enough for the Chinese to follow through on their agreements dagrub. I guess that was a pretty canny move by Linc, although I have doubts about whether they'll be able to protect their intellectual property if Xinwen have it on their home turf. As to whether we can just sit back and relax while agreements are made material with Xinwen, I thought this Robin Bromby article from The Australian can be applied to the outlook for Linc, even though it's about other companies.

Iron ore shakedown

"THERE were two ominous developments on the iron ore scene during the week. First, the Chinese forced Mount Gibson Iron (MGX) to take a huge cut in its iron ore price by, first, reneging on contracts and then having a second group come in with a "rescue" offer at a low price -- an offer that MGX could not refuse. Then we heard reports that the Chinese would strong-arm a number of emerging producers here to sell them substantial equity.

Warwick Grigor at BGF Equities sees a pattern. He characterised the Mount Gibson incident thus: "It is a case of good cop, bad cop, with all being directed by the central authorities". He wants the Australian Government to get involved to provide some muscle against Beijing's machinations.

But he also believes there is another factor at work -- and that is the fact that BHP and Rio Tinto (RIO) might not be too displeased at seeing the industry suffer in the short term, thereby knocking out much of the emerging competition. The Pilbara duopoly "would get their rewards later with a return to a higher market".

The fact that the Chinese now cannot be relied upon to honour offtake contracts is something that the people at Sundance Resources (SDL) might keep in mind. The company this week reported a 2.2 billion tonne resource, including direct ship ore, at its Mbalam project in Cameroon. This is one of the few large, undeveloped iron ore projects not controlled by a major.

"According to sources, there is a great deal of interest in Sundance from possible iron ore buyers and financing players. Chinese steel mills would, one assumes, be involved. But you would have to think twice about signing with a Chinese partner after the MGX experience. As Grigor adds: "It has long been said that Chinese contracts are not worth the paper they are written on, but there was a feeling that this time it might be different." Apparently not."

Pure Speculation: Robin Bromby