International Mining & Infrastructure Corporation plc (AIM: IMIC) will comment full in due course. Suffice to say the warnings were well known, quite why anyone would be holding this stock currently is beyond me; The current climate even risks the AFF premium I never rated...Haircuts required. My concern is the assumed price....which says a lot of IMIC's beliefs which do not mirror mine!
Atb Fraser
Apologies kept pressing update now save so three version...
Fraser- yes- IMIC have been caught up in the Great Iron Ore War (as my book may eventually titled :-)) ) with RIO and BLT digging it up at circa $20/t and shipping it at circa $8/t to China, they can ramp up and knock out a whole load of debt carrying miners over the next 2 years and then relax in the knowledge that they have capped capacity and scared possible future competitors off future high capex projects for a long long time. A game that only miners focusing on the aftermath in a few years can play and they may run into regulators in due course. That's my take on the current battle, for what its worth and it makes the supermkts "price war" look like a gurning contest by comparison. To survive, IMIC need to box clever, DSO was always the reason they went to Ntem (closer to to coast) before Nkout (much bigger deposit) and the key to both is infrastructure and the Sundance project- could they move to a pig iron model (like BAO) or look to see the product locally as a railway and other major building is needed at the port etc. The AFF related bonds don't move into IMIC shares until 12/15, by which time the whole of the iron ore market will have been transformed. Only the smart will survive this one. Predictions for an iron ore price recovery in 2015 are silly in my view, based on the need to effectively starve out the competition.
ReplyDeleteCheers. The Leggie
Fraser- Hi- Nice to see you have kicked the muppets out. I will attend the trials of said muppets in due course that's if they haven't fled in their WRN funded superyachts by then :-))
ReplyDeleteRe RIO- GLEN have presumably leaked their interest and knockback with a view to putting pressure on the RIO board to talk. I cant see the numbers working out as RIO will be throwing off cash at a good rate from 2015 onwards and GLEN have a different business model, which means that RIO are unlikely to accept without a decent premium. Still GLEN have been saying they wanted to add iron ore to their core divisions as they can probably see the effects of the current war from 2016 and beyond and the power that the last men standing will have at that time. Perhaps GLEN will need to settle on a more bite sized iron ore producer- a couple of obvious neighbours to RIO and BLT in Australian I could name- and the other issue is copper assets, as they would probably have to shed all of RIO copper ops to get the Chinese to approve. As usual lets see. In the meantime nice update from CEY today and CAZA looking v well place re their latest moves too.
Cheers. The Leggie
CAZA might surprise a few (not Malcy or I though). Very interesting hold CAZA and one I hold with high expectations.
DeleteDon't expect the Rio story to end just yet!:-)
TcFraser