Geoprof,

maybe I was not clear, I was just responding to someone else. Yes, clearly the lowest cost producer will most likely survive.

Examples of lower cost producers out-winning the higher cost producers are fairly common, the Chinese bascially knocked all western magnesium producers out of business, greatly reduced aluminum and steel producers as well. In pure mining plays less so because of their limited land and resource size.

Chrome is a tough one since there are well established(with paid of mortages) producers with possibility of increasing capacity. They are not just giving a free pass to take their market share. If you want to take over their business you will have to fight, and yes possibly selling below cost as long as necessary. Nickel less so mainly because the high pressure leaching of limonitic ores has not been as successful as 'hoped' for, but still plenty of nickel capacity and reserves around. As you very well know, there are periods of good prices and high profitability and then there are times where you just try to pay the bills.

Capital costs are extremely important to figure out if a project goes ahead or not, probably the most important. One measure is that you typically do not want the capital costs to be more than 3 times your annual revenue. Another for nickel, is that the capital costs should not exceed approx 25 $ per annualized pound of nickel produced(used to be about 10$/lb of Ni, now even higher than the 25$). So if you plan to produce 100 million lbs of nickel per year your capital costs should not exceed about 2.5 to 3 billion $. Unfortunately for both Vale and Xstrata their new projects are even worse off.

Personally, I see lots of changes in the ring, but as long as NOT controlls the nickel we will be in the thick of it. I also predict that Cliff will not last too long up there. I also predict that this year we will discover a couple of new and exiting finds, surely interesting times ahead.