Off and racing, page-105

Didn't FMG's quarterly report indicate the discount for their poor grade ore widen to roughly 26-28% from spot...that being said FMG is a pure IO play. When iron ore booms it'll boom, when it falls it'll fall. If the prevailing spot price falls to $40 and FMG takes a 30% odd discount then it won't look so attractive. It's why the company trades at such a discount to its current forward PE on $65 IOP. It's also why the company was on the brink back in January 2016. BHP was not in such a position.

Bhp is the most diversified of all mining companies. It's safer but won't necessarily preform better than pure plays. Rio is more skewed to iron ore which is why I'd argue they've out performed recently. But look beyond 10 years or Elliot's assessment and you'll see they almost went bust from a 100% debt acquired Alcan. Iron ore has since boomed this RIO outperformed BHP given its earnings are most effected by the IOP. Equally Rio wasted $4bn on RIV, then sold it like 2 years later for $50m or something (LOL).

Both RIO and BHP have wasted $10s of billions on terrible acquisitions. FMG has had too much debt to do anything of the sort yet. Still the FMG story from 2003 is what dreams are made of, but it doesn't mean it'll out perform RIo and BHP in the future. It owns tier 2 deposits.