1. CONSOLIDATION IN THE GLOBAL IRON ORE SPACE

From time to time we've seen how geopolitics drives business decisions and how this, in turn, often rewards Discovery Investors. A recent example is India’s classification of iron ore as a strategic resource and her subsequent restriction of iron ore exports. Last night, this phenomenon came to the fore again as Cliffs announced a takeover of Consolidated Thompson for $5 billion in cash. We've written about the accelerating dynamics of the iron ore market in the past and it appears that our forecasts are coming to fruition as evidenced by this deal. Thus in the Grip of the Great Convergence1 common, old iron ore is being viewed increasingly as a strategic metal. To this extent in 2008 commodity and China guru Jim Rogers remarked, “Selling China in 2008 would be like selling America in 1908.”

Written by Michael A. Berry, Ph.D. - [ Discovery Investing Web Site ]