Replies to post #3278 on The Rising Influence of Rising Affluence

[DewDiligence]

#msg-66056870 has yet another data point to add to the discussion on the bullish outlook for iron ore.

[moneyman1010]

DD any thoughts on potential of Vale increasing their dividend

[DewDiligence]

CLF is up almost 6% today on no news. Did some investing guru mention it on CNBC?

[dewophile]

mining companies

a few questions from someone ignorant in this area if you don't mind dew:

1. given CLF has greater exposure to the US iron ore market, do you think at this point - with what looks like a slowdown in the west - vale or rio/bbl are the better investments (as more pure china plays)
1A. i noticed that seaborne iron ore is factored into the formula for cliffs iron ore pricing, but do you know how much weight this is given relative to other components in the equation (i.e if weighted heavily i am less concerned about #1 above)
2. input prices in australia seem to be increasing. to what degree will this offset growth and profitability for the australia miners
3. given the above would you say VALE is the best bet at this point? i know there is some political meddling but the PE is most attractive (although given its size i don't know about growth potential relative to a smaller company like CLF)
4. should i just keep my money in cash given the market turmoil?!

tia

PS: do you still think CLF is a buyout candidate?

[DewDiligence]

4Q11 iron-ore benchmark price will be essentially unchanged from 3Q11:

http://www.reuters.com/article/2011/09/01/ironore-contract-idUSL4E7K10IR20110901

[DewDiligence]

Rio Tinto sees doubling of global demand for iron ore during next eight years:

http://www.reuters.com/article/2011/09/01/rio-tinto-ironore-idUSL4E7K10EP20110901

[DewDiligence]

VALE Takes a Flier on Alaskan Copper and Gold

[Highly unlikely that this project will ever move the needle for a company as large as VALE, but I’m posting this anyhow to placate the gold bugs who read the board :- )]

http://ca.news.yahoo.com/millrock-resources-signs-deal-vale-look-copper-gold-140335523.html

›October 17, 2011

VANCOUVER - Millrock Resources Inc. (TSXV:MRO) has signed a deal with Vale Exploration Canada Inc. to look for copper and gold in Alaska.

Under the agreement, Vancouver-based Millrock will receive at least US$1 million in the first year and an additional US$1 million at Vale's option for early-stage exploration work to identify a project.

Once Millrock nominates a designated project, Vale will have 180 days in which to accept or decline the project.

If accepted, the project will become subject to a joint venture agreement that could see Vale earn up to a 75 per cent stake, depending on how much of the exploration and development costs it pays for.

Millrock has a dozen active exploration projects, including eight gold-copper properties in Alaska, and four copper prospects in Arizona.

Vale, which owns the former Inco operations, is the world's largest producer of iron ore and second largest producer of nickel. Both minerals are used in making steel, stainless steel and other alloys.‹

[DewDiligence]

Russia's OAO Magnitogorsk Iron & Steel Works acquires Australia’s Flinders Mines for $540M, an 80% premium to Flinders' price the day before the announcement:

http://online.wsj.com/article/SB10001424052970204630904577059191050333690.html

Flinders' flagship asset is a [iron-ore] project in the west Pilbara region, some 687 miles north of Perth in an area dominated by iron ore giants BHP Billiton Ltd. and Rio Tinto PLC.

Among the mining companies I own, CLF is the one with the strongest buyout vig. (I added shares Wednesday.)

[DewDiligence]

Mining stocks are on fire today—BHP, VALE, CLF are up 5-7%.