God, I feel old now. Took a job in Seattle in 81 and moved up from Oregon, then the company transferred me back to Oregon. The short version is I wound up in Charlotte, NC where I built houses on Lake Norman for 12 years. Charlotte is nice because it isn't like the real south and if you want the southern feel, just head over to Lincolnton. But the pay is better in Charlotte, you may to switch over to Southern Baptist. This was my main problem, not much for church or religions.
When I lived in Seattle, David Krieg was the quarterback and things were halfway exciting. Even the Huskies were doing good, but neither one could hit the big one. Good to see them in the big game again. In the 12 years I lived in NC, never came across a single Seahawk fan, lots of Steeler fans fill up a bar near Mooresville, but can't even fill up a Chick-fil -a with Seahawk fans.
"The ploy by Australian majors Rio Tinto (Xetra: 855018 - news) and BHP Billiton has pushed iron ore prices to their lowest in more than five years.
That should have squeezed out smaller producers, helping the majors to increase market share and the price to rebound.
But a recent slump in freight rates, largely due to a collapse in bunker fuel prices, is saving the minnows as much as $16 per tonne, almost a quarter of the current iron price.
This, coupled with the benefits of lower diesel prices at the mines and falls in emerging currencies against the dollar, is helping them resist at least a little longer."
BHP an RIO may want to rethink their current path. They would be better off if they increased their margins and bought out the smaller miners.
If they sell that ore in the US market, they will need to pelletize it and the high grade ore is not the best to use for standard iron ore pellets. With the cost to mine it and transport it, they will be looking at a cost of $80 a ton. Then they will need to pelletize it at an additional cost of $15 a ton. To meet CLF's current contract price, they would have to sell it for $100 a ton. If Vale can't break into the US market, a BL mine will not be able to do so.
It could go the DRI pellet route except they would need to team up with a steel company to provide the pellet plant near the steel mill where they can ship the ore to. The cost to transport DRI from Canada would be so high due to the hazardous nature of DRI.
If they sell BL for $1 billion, they will use the money to reduce debt, not pay a special dividend like Casablanca was first pushing for. LG knows he needs to get the debt down to $1.5 billion first and they can do it with the sale of the Logan County coal mine and a billion for BL. $1.175 billion can easily retire $1.5 billion in long term bonds.
All of this will be laid out with Q4 earnings and the big players like Blackrock knows what is going on.
When a deal on BL is announced, there will not be enough shares to cover. Then when earnings come out with debt reduction results, the short squeeze will be on. This stock will be event driven, not like the rumors shorts built in the media in the past.
Looks like people want to be in position ahead of a three day holiday. The people in Canada will be working on Monday.
It has been tested in CA and OR, people in general don't like it as the government can track them. If I had teenage drivers again, I would be all for it.
Have you ever watched Mountain Men? There is one guy in NC that has converted his truck to run on wood chips.
Shorts are selling in the AM when the order book is narrow to get the biggest impact so that they can cover their positions in the afternoon.
Vip, I think all parties understand any purchase has to be better than what CLF can get out of bankruptcy. That is why a purchase would be a better deal.
At some point the gas tax will be gone and replaced by a GPS tracking system that makes you pay for where you drive. There is going to be a need to collect taxes on those that use alternative fuels like electric and nat gas. I know of people that use compressed nat gas out of their garage and pay no road tax on the fuel.
Exactly what I needed to buy more at these levels. With hedges in place it is easy to project record earnings in Q4. And yeah their debt level is high, but they generate more than half of their interest expense off their Guarantor Subsidiary.
This is part of LG's negotiation tools to bring the government and interested buyers to the table. He is doing the same thing with Wabush. It is in the best interest of the government to put together concessions to keep the mines in operation with new owners committed to process ore. Bankruptcy is going to cost the government and employees in lost wages, taxes and pensions.