GLG News by Council Members Knowldgeable on Australian Coal Mining Industry

Markus BatesPresidentBankers Energy, LLC

RIO - Getting the Most Value for Your Product

September 12, 2008

Analysis of:Brazilian Miner Vale Confirms Talks to Raise Asia Iron-Ore Prices | online.wsj.com

1.  Timing of CVRD announcement is rather odd with record iron ore inventories and steel prices beginning to slide in China. 2.  Longterm mismatch between iron ore supply and steel demand not readily apparent in today's market. 3.  The gap in vessel freight spread between Brazil and Australia into Asian customers has narrowed. 4. True value is in the product itself.  Best way to optimize this value is to sell to the highest bidder. 5.  Benchmarking pricing sytem is outdated.  Selling ore to highest bidder could possibly lead to an index or swaps market.

Markus BatesPresidentBankers Energy, LLC

Cleveland-Cliffs/Alpha Natural Resources Became A Takeover Target Once Deal Was Announced

July 28, 2008

Analysis of:Cleveland-Cliffs' Fateful Flaw | online.wsj.com

Contrary to the hedge fund, Harbinger's, belief that Cleveland-Cliffs takeover bid of Alpha was to put Cleveland-Cliffs itself out of reach of potential acquirers, my first thought on this deal was: which steel company is now going to buy this newly formed company?  These are two companies that sell commodities which are in short supply longterm and their value jointly may be much more valuable to a steel company than individually.  Hence, this would create greater value to shareholders of both Cliffs and Alpha.

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