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Iron Ore M&A: evaluating the opportunities

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Report summary

We have identified seven iron ore assets supplying the seaborne market that could potentially be up for sale in 2016 Vale's Midwestern System Anglo American's Minas Rio and Kumba operations Atlas Iron Ferrous Resources Arrium and Karara and compared their cash margins production and reserves. By looking at these attributes we have concluded that the Midwestern System Kumba and Minas Rio are the standouts. We expect these assets will be cash positive in 2016 have positive NPV and upside to production. The remaining assets will likely only appeal to buyers with a bullish long term view of iron ore prices a strategic interest in acquiring the assets or a belief they can fundamentally lower costs.

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  • Document

    Iron Ore M&A: evaluating the opportunities

    PDF 314.92 KB

Table of contents

Tables and charts

This report includes 6 images and tables including:

Images

  • 2016 breakeven costs by asset (62% Fe fines delivered to China)
  • Remaining PV vs. 2016 cash operating margin
  • Asset production (wet Mt)
  • Asset resource size and quality (bubble size as raw mineral resources in wet Mt)
  • 2016 operating margin vs. marketable reserves

Tables

  • Key metrics comparative table by asset

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