geologist or mining engineer help please, page-42

Pelm, I have a couple of clarification questions for you if you don’t mind.

You have previously said that “To beneficiate, for 10 million tonnes of product per year is well over 2000t per hour, that is a kickarse bene plant.”

If (note I said IF) BRM goes to 30MT production, I would assume it is unlikely that they would need three separate kickarse beneficiation plants. I assume a plant has certain stages that comprise the bottleneck to production and it is only these stages that might be duplicated.

To assist your reply, Westcott has said “Most of the Silica will be gone in the first pass of processing,this entales screening,then heavy liquid screening, then will be mixed with the fines from the DSO which is needed for sintering.” By liquid screening you have previously interpreted this to mean HMS or heavy media separation.

As I am obviously ignorant of these issues, some clarification is sought. Anyone else who has an opinion please feel free to add your ten cents worth. I suppose I am trying to explore the secondary issue that naturally follows assuming they can beneficiate the ore. That is: Can they beneficiate it to an optimal scale given the size of the resource? It dramatically affects the size of the cash flows of the project and their timing.

My second question relates to your post above, “don’t see FMG sharing the pipework”. Is that because sharing is just a drama (and by logical extension they would not share a rail spur), or is it because it is not physically possible to share a pipeline?

My response to other points made in your post are:

We agree that BHP could drag this out in the courts. Difference is I assign a 30% chance they might, whereas you are much more confident that they will.

FMG has indicated it is selling down its rail assets as rail is not the money spinner that iron ore is. Rail is not a money spinner. Rail is a natural monopoly asset that will be subject to regulated rates of return in the long run. Cash flows are backed up by long term contracts, maintenance is well understood and there are few market risks. Rail is a low return, low risk business.

Not suggesting rail access is not a Board decision for BHP. However, Boards make decisions based upon board papers prepared by the executives of the business. These are the executives that WR will be negotiating with and by logical extension have some scope to influence. BHP executives and the Board will explore the strategic issues I have addressed. They will explore the consequences of declining access including their scope to hold things up in court as you say. The only problem is that they are running out of courts and the Federal/State Government’s are under pressure to resolve the Pilbara infrastructure deadlock which has dragged on for more than 4 years already. Remember, BRM is seeking to have BHP transport its ore, whereas FMG is seeking that plus a capacity to run its locomotives on BHP rail lines. There is a world of difference.

Good to see you are posting regularly on BRM even if you are not a holder yet. Good also to see that posts from all sides are now focussed on issues rather than personalities.