That $6bn TenderBook..., page-106

This post follows the theme of my previous post, which with the benefit of hindsight should have mentioned team utilisation, and specifically mentioned that small projects can help optimise team utilisation, and hence team stability.

I have often mentioned the undesirability of phosphorous in iron hour, and to keep HC posts brief, made no mention of other impurities and undesirable characteristics. I'll now touch on aluminium as an impurity, because it impacts RIO, and what impacts RIO impacts NWH.

At https://www.fnarena.com/index.php/2018/08/10/material-matters-china-thermal-coal-and-alumina/ one can read the following:

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• Citi says that back in the first half of 2016, the combined BHP Newman Fine penalties for alumina, silica and phosphorus were about US$0.40 per tonne, but this has exploded tenfold to about US$4 per tonne now. The biggest impact has been alumina penalties that are about US$8 for every 1% over 2.25%.
  
  The penalty on silica content peaked at about US$4 per tonne, but is now back at US$0.20 per tonne. Rio Tinto’s Robe River products have relatively high levels of these impurities and are being discounted as a result, Citi says.
  

What is bad for RIO can at times be good for NWH, if ameliorating the undesirable requires work for NWH to provide RIO with substitute ore that is desirable, either directly or indirectly as an uplifting component of Pilbara Blend. Obviously, the same is true in respect to other miners. The low-phosphorous characteristic of Silvergrass ore is an example of NWH getting work to help RIO export more high-phosphorous ore by blending it with ore from Silvergrass – in other words, Silvergrass was catalytic for RIO.

This is not a matter worth dwelling on as a NWH-future-revenue matter – the post simply supports the view that iron ore miners including RIO must heed the increasing emphasis on higher-grade iron ore in China, and probably generally, and this can be to NWH's advantage. Also, generic predictions of future iron ore demand and pricing should be viewed for specific grades of ore, because ore aint ore Sol. However, if small shifts in the total tonnage are important to miners, they would be more inclined to look to the reliability of a contractor than quibble over small differences in quotes for a mining service, which ties in with the notion that margin and other factors are what should interest investors in NWH.