TFG,Thank you for your continued insightful posts.Regarding ASI,...

TFG,

Thank you for your continued insightful posts.

Regarding ASI, my guess is that they would happily pay $13m to take over the J/V and then pay the $25m on / by the 15th May. As you have stated, BMG & ASI are spending some decent lawyer dollars and time on this dispute, with the Hawson project the jewel in the crown of BMG's assets.

My information is that ASI had to pay BMG $105m to increase their stake in BMG from 25%to 50%. So, two options:

* BMG stays alive and pays the $25m to CAP, ASI have to pay $105 million to BMG to take a contoling share in BMG, which in turns controls 51% of Hawsons, so rough and ready, BMG have 25% of Hawsons after spending $105m. IF BMG stays alive, I can't see ASI staying around as a shareholder (unless they have majority control), to much bad blood. I see this as the least desirable outcome.

* IF BMG folds and ASI takes over the J/V, will pick up a 51% in Hawsons for $38m.

Hmmm, $100m for 25% or $38m for 51%.....no wonder its a battle of the lawyers.

My money is on ASI taking over. Would be interesting if the Judge orders that Hillam buys out ASI's current share holding in BMG, would love to see how the price is calculated.

Below is a quote from the Roger Montgomery blog regarding chinese interest in iron ore mines:

"The goal of the Chinese is to eventually source half its imports of iron ore from owned or co-owned mines by 2015. They want to diversify away from their reliance on BHP, RIO and Vale, for obvious reasons. For this to occur the Chinese will need to continue to invest money into iron ore and other commodity projects worldwide, and to do so by buying/financing projects. If this is to occur, as I expect it will since the Chinese have made it a priority".

I have also thought what would happen if ASI & BMG walked away. As a long shot, I wonder if BlueScope (BSL) could be a potential partner?

BSL currently buy magnetite ore from Grange Resources (GRR) in Tasmania and CAP could transport ore by train straight into Port Kembla from Hawsons, where BSL have port access, which is very much free due to BSL withdrawing from steel export markets. Look at how the share price for OneSteel (OST) has rebounded since buying the magnetite and hematite assets of WPG Resources for $320 million. BSL need to control the cost input of ore prices and diversify from their traditional manufacturing base.

Maybe a little to much creative thinking!

Either way 15th May is D-day!