From Reuters:
BHP remains “confident” of a 2017 restart, said BHP executive Daniel Malchuk during an interview in Rio de Janeiro. He added that Vale, Samarco employees, regulators and financial stakeholders must all agree on the terms of renewed operations at the mine in the mineral-rich state of Minas Gerais.
“We continue to work quite hard to find a solution,” Malchuk said, calling it “a complex situation that involves many stakeholders.”
…”It does make sense to use Vale’s infrastructure, no question about it,” he said. “But it needs to make financial sense for Samarco and for us as a shareholder.”
The complexity of talks, he added, means nothing is guaranteed, especially because licensing agencies, Samarco employees and debt holders must all also be on board with restart plans.
“I continue to be confident that there must be a solution,” Malchuk said. “But I can’t say that everyone will.”
…BHP is also bracing for the impact of lower coal prices, Malchuk said, noting that stimulus efforts by the Chinese government continue to sustain strong demand there.
Because the company is not sure when policy may change, BHP must be ready for a drop in demand. “You can’t keep sustaining prices through short-term policy,” he said.
If Samarco does restart, that will grow new supply next year to 80mt. It should. Break evens are $35 and pellet premiums are high again with coking coal so nuts. In fact, right now if it were running it would be printing money.
Meanwhile, China’s paper bubble keeps on inflating with Dalian up another 4% today.
