That $6bn TenderBook..., page-260

Sabine

It is the strategic importance of the Iron Bridge Project that interests me as an NWH shareholder, not the immediacy of NWH news related thereto, nor even the size of a near-term contract that NWH may obtain at Iron Bridge. There are two strategic aspects to that project, a) it is magnetite, the iron ore of the future, as I wrote earlier; and b) the importance of FMG's relationship with Formosa Group, which I'll comment on in this post.

Formosa Group's steel project is a huge four-phase project that, apart from building the largest steel mill in South East Asia, required building a deep-water port. The four phases relate to the commissioning of four blast furnaces, which I think will, to a degree, be product specific, and hence require different ore grades, which may be relevant to Iron Bridge ore. The second blast furnace was fired up on 18 May 2018.

I do not know when Formosa commenced investigating its Vietnam adventure, but it was before 2008. Formosa admitted responsibility for a significant environmental disaster in April 2016, and US$500 million in damages, but the negative political reaction was not salved by that, and delays in the project occurred. It would, IMO, be Formosa Group that has delayed the Iron Bridge project, not FMG. However, this delay may be serendipitous, because the NWH of now is far better positioned to be the no-brainer choice for the Iron Bridge Project than the NWH of yesteryear, and it can do more than it could do in the past. Additionally, there is currently no shortage of alternative work for NWH. The more that NWH positions itself for FY21, FY22 and FY23, the better, which translates into a higher PER, and hence SP.

If you want to understand the significance of FMG's joint venture with Formosa Group, google “Formosa Ha Tinh” 2018 2019 to bias the search to current information.. The steel will not be used in China, but rather in Vietnam and other countries that are expected to boom at a much faster rate than China is likely to grow in future. See https://www.spglobal.com/platts/en/...s-kick-off-2019-with-a-spike-in-jan-shipments

On the environmental disaster, read http://focustaiwan.tw/news/asoc/201806200031.aspx

On the deep-water port, read http://bizhub.vn/news/son-duong-dee...million-tonnes-of-cargo-this-year_302178.html