The global market for chrome is a very small one. Compared to the production of Iron ore, copper and nickel, it is tiny. There are iron ore mines that single handedly move twice as much tonnage annually as the global demand for chromite. This is an important fact. Another important fact is this commodity is only produced by a few companies, and none in North America. There has been discussion about a chrome consortia and long term contracts. This is no doubt an issue. Resourse based companies have to invest billions in capitol infrastructure to make steel, copper products, paper products etc. They need longterm supplies of raw materials. The suppliers of these goods also need significant capitol and therefore need long term sales contracts so the two groups are dependant on each other. In the early fifties, five steel mills in USA had problems with supply of iron ore concentrate and pellets. Although they were competitors, they created the Iron Ore Company of Canada and partnered with Hanna Mining out of Cleveland to produce a stable quality supply. Hanna managed the mining operations, the steel mills bought all the product, and the partners decided on production levels and prices.

At present, neither suppliers or end users of chrome need additional capacity. Steel mills have long term relationships with suppliers. Suppliers presently have a huge excess of capacity. These suppliers are global players, one being Xstrata. South America has it's challenges but you don't walk away from billions of dollars worth of investment before taking every measure to overcome the problems. I really enjoy Wilbur Smiths books and although they are fiction, they give you an understanding of what South Africa was like in the past. I am currently reading Nelson Mandella's book "Long Walk to Freedom". Man, South Africa has been in turmoil for a long long time but the country has been resilient and the companies that work there have been as well. The ROF chromite will have to combat that resilience and over capacity with price and quality and even then it will take some time and a hell of a lot of perserverance and commitment.

There will only be one chrome producer in North America (possibly). Cash flow and markets will be a challenge. Therefore, in my opinion, there needs to be a complimentary source of revenue and with NOT it can be nickel. With Cliffs, it can be the rest of their operations. Will their BOD be willing to jeopardize this given the uncertainty and the risk? I think Cliffs would be better off supporting the NOT/FWR consolidation and setting up a supply partnership. We have all the parts, we only need assembly.