FMG 2.02% $25.70 fortescue ltd

As we know, there is concern about future availability for...

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    As we know, there is concern about future availability for Domestic Gas and prices in Aus.  The Pilbara is no exception with it's growing energy concerns.

    Hence FMG's deal with TransAlta for electricity supply...
    http://www.horizonpower.com.au/pilbara-power-project.html

    That leads us to FMG and Alcoa (AAI) interest in Apache sale, which could very well end up in a premium purchase as cashed up Woodside (WPL) are also interested, that is a concern...

    https://au.news.yahoo.com/thewest/a/25295182/stokes-forrest-ponder-apache/



    * * * *

    On a side note - Northern Star has found Coal in the Pilbara which may stem into FMG tenements....

    The following is just my thoughts/speculation on options with such a find depending if shallow (open cut) or deep seam, no need to read on if such doesn't interest you....

    "The bulk of the exploration work completed to date has been on tenements that are 100 per cent owned by Northern Star.  But the company said there is a potential for the seam to run onto tenements held by Fortescue Metals Group."

    http://www.miningaustralia.com.au/news/northern-star-uncovers-coal-in-the-pilbara

    This may give FMG options for a Coal Power Generation plant or if the Coal seams are deep enough, a UCG (Underground Coal Gasification) Syngas to SNG (Synthetic Natural Gas) Project and sell the Gas to Trans Alta, either of which would not leave the area dependent on LNG and rising costs/prices.  

    "Valuation of a 25PJ/year keystream project.
    We have modelled the propose project on the basis of preliminary assumptions that include a capital cost of A$750m, to include an oxygen plant and a power station for the site needs, and a contract SNG price of A$8/GJ."

    http://www.carbonenergy.com.au/IRM/...69051805/EdisonInvestmentResearchCarbonEnergy

    Alternatively if the Coal seems continue to be shallow in FMG holdings then it may be conducive to open cut and then Coal to SNG  (probably need an international company IP for that one).

    For the record I have FMG, WPL and CNX and would not be thrilled by a FMG/AAI consortium and WPL going into a bidding war for Apache sale.  Paying Premium prices is not thrilling from either aspect to me.

    Whilst I don't see an Open Cut lower grade Thermal Coal Project as particularly of interest at the moment given Coal Prices are also down around rock bottom, any of the above might prove profitable and productive or conducive to FMG needs/concerns.

    As I said, just my left field thoughts for a side note coal discovery.
 
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