I spoke to one of our managers last week about some of the stuff you have said on here about the DRI pellets and she said the DRI shipments you are referring to are the two 60,000 tonne test runs that were shipped to Trinidad of all places. I was told by another person the plan to make the Mustang pellets has been shelved. I'm not sure if that means the company is currently trying to negotiate a longer term arrangement for our Viceroy pellet or not. Months ago we had a meeting to discuss our future and it was noted that we only have enough ore exposed to make 3 million more tonnes of Viceroy pellets at the current blend of 20%-30% Empire 80%-70% Tilden CD3 ore. After that, about $500 million would be needed for striping to go after another 13 years worth of ore.
I have a feeling that once ArcelorMittal and Cliffs complete their negotiations with their respective labor unions and the unions ratify whatever contract they get, the two companies will most likely settle on a new pellet agreement. Cliffs bargaining unit goes back to the negotiation table later this month so I expect progress will be made soon now that US Steel has theirs. I think the companies figure it's not wise to disclose a new pellet agreement between themselves in the middle of negotiations with their bargaining units. No need to give them anything substantial to stand on you know.
Gonclaves is doing the same thing with ArcelorMittal that he did with the coal company who wanted to buy those properties. He is setting up the Empire with an early April no return date where if we go past that point, the concentrator will have considerable delays in production waiting for the lead times on primary mill liners since no more liners are being order after that point unless a new contract is inked. Also, they are reducing the inventory of components in the warehouse by another $15 million so the lead times on those items will be a while too. As lines go down at there "20% life left in them state", we have been instructed to use them as an additional warehouse for the other lines still running. We just have to have work orders in to document what components have been cannibalized in case an agreement is reached so we can quickly order the additional parts and get the work planed if needed to restore them in a timely manner. They are going to keep a documented resurrection cost total so the company knows how much it will cost to bring everything back up if needed at any point along the way. If no agreement is reached, we are slated to shut down around August.
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