From Bartho:
While Fortescue has done a remarkable job of lowering its costs — it nearly halved its C1 costs in the December half relative to their level a year earlier — they are higher than Rio or BHP’s and its ore attracts a discount of up to 15 per cent against the index price, whereas Rio’s “Pilbara blend” attracts a premium to the index.
The deal with Vale, which could impact about half Fortescue’s 165 Mtpa production, would have an impact both on its costs and the discount its ore attracts.