Bullish Sign? - Bounced off 200 EMA, page-2165

Sabine

Teribile putu (Terrible to think), I wrote “Timeo Indiani . . .”, whereas it should have been "Timeo Indianos"(accusative plural of Indianus).

I have often posted on high-grade iron ore, its price premium, the demand for quality in China, and how this can lead to projects like Silverwater in RIO's case. My last post on that theme was on 14/08/18 (Post #: 34919709). At https://thewest.com.au/business/min...c-as-china-chases-higher-grades-ng-b88933207z you can read about the issue in respect to FMG, except that no mention is made on aspects of ore quality, other than Fe content. FMG is belatedly going down the path that RIO has taken with its Pilbara Blend. Why it took so long to consider remedial action is strange – perhaps Twiggy should have focused his mind more on running FMG than presenting himself to Australians as an all-knowing altruistic rock star of the Bob Geldof variety.

Part of that article reads:

But revenue fell 18 per cent compared to the previous year, with the drop blamed on high steel mill profitability in China which encouraged use of higher iron content ores to maximise production.

To combat the decline, FMG will introduce a 60 per cent iron content product, named West Pilbara Fines, from the second half of 2018/19 ahead of the development of its $1.3 billion Eliwana mine and rail project.

West Pilbara Fines will be sourced from existing operations and provide customers with a higher-grade product before full-scale production at the higher-grade Eliwana project.

It will initially be produced by blending ore from the Firetail mine with higher iron content ore from newly developed areas to the west of the Cloudbreak mine.

NWH is well into this vein of business (projects predicated on developing mines that contribute to achieving quality blends that sell at a price premium).