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SDL Strategies

  1. bigstar

    1,195 Posts.

    SDL main strategies in the current market and what are factors that can help to:

    1) Reducing capital and cash cost
    Factors :
    - Continuing reduction in the oil price and the significant reduction that has recently occurred in sea freight.
    - Increasing DSO tonnage, if possible at or above 50MTA
    - Continue to look for neighboring projects that can share cost of rail and port (Nkout has better chance as project is more advanced than EQX, etc..)
    - Capturing Europe and Middle-East markets to lower sea freight / transport

    2) Increase strong casfhflow
    Factors:
    Increasing DSO tonnage, if possible at or above 50MTA (better doing this in the first 5 years to benefit of Gov tax free)
    Reducing cash cost (see item 1)

    3) Diversification could change the dynamics and reducing risks :
    Factors:
    - Capturing European market by selling Pellets with premium price
    - Pellets offer an option to command premium pricing against a drive to improve energy efficiency and cut back on pollution
    - Europe has an ambitious strategy to cut carbon emissions with steel targeted as one of the industries for regulation. The industry is expected to cut emissions by 34 and 40% by 2030 and 83 to 87% by 2050. European steelmakers will struggle to meet these targets.
    - The European steel maker’s association, Eurofer, thinks that only a 10% reduction in emissions per metric ton between 2010 and 2030 and 15% between 2010 and 2050 is achievable based on existing technologies (Pellets...)
    - China is also looking to cut pollution which has led to the idling of some sintering plants in the country, which could lead to an increase for imported pellet and lump substitutes.
    - A 200 MW hydropower station has now been built in the Cameroon near Kribi and
    close to WAFM’s Binga project with an additional 216 MW plant to be finished in 2014.
    Availability of power could be a game changer and set the path for new steel mills to be built in West Africa.

    Example: African Minerals eyes lucrative Europe with iron ore deal : "African Minerals Ltd is exploring the possibility of blending its iron ore with products from another mine in Sierra Leone to produce higher-grade ore for sale to steelmakers in Europe"

    http://www.sundanceresources.com.au...7159388/SPAngelIronOreReviewWestAfricanJunior

    http://www.4-traders.com/AFRICAN-MI...Iron-Ore-and-Beat-a-Stagnant-Market-19327478/

    http://www.dailymail.co.uk/wires/re...rals-eyes-lucrative-Europe-iron-ore-deal.html

    SDL Quarterly Report (Jan 2015) :
    upload_2015-2-4_0-3-25.png

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