The article in the Weekend Australian on Rio's Simandou mine ia all good news for the junior iron hopefuls like Royal. Rio has announced that the cost has blown out to $20B. Thats a capital intensity of over $200/t! I note that in one of Royal's presentations they showed their Razorback iron Project has an intensity of around $130/t.
Importantly, Rio has announced that Simandou will now be delayed "at least until" 2018. Thats a peak 100 million tonnes per year that will not be on the market for some time. This can only underpin the iron price going forward (not that iron pricing has been weak, in spite of all the best efforts of ill-informed media that continue to prematurely announce iron's death!).
Royal is on a winner, I reckon. Woof!
MFE Price at posting:
5.2¢ Sentiment: Hold Disclosure: Held
