Maigret1, the final step in calculating a discount rate is to factor in the debt/equity WEIGHTING. Hence, the term of WEIGHTED average cost of capital (WACC)! It's a WEIGHTED AVERAGE discount rate according to the capital mix on your balance sheet. I do this stuff for a living!
FMS has no debt, so fine, its discount rate is based upon its capital structure of 100% equity capital, and 0% debt capital.
The cost of equity in mining firms is derived by a calculation called the Capital Asset Pricing Model (CAPM) which is always more expensive than debt. Using 10% basically assumes that you as a shareholder have a requried rate of return (RRR) on this stock of 10% per annum (dividends and capital growth combined). This is what the cost of equity assumes...what we as shareholders "charge" or expect as a rate of return for the use of our money (whilst considering the risk) in FMS over the next 20 years of the project life.
As a shareholder of FMS, is 10% pa high enouh for you? Is this a satisfactory risk compensation for handing over your money to a mining company?
If so, then you may as well just cash in and put your money in a high interest saver account that'll be paying close to 8% in a couple of years as the cash rate increases. It's only 2% less than RMS, but hey, it's a hell of a lot less risky!
So, putting the 10% to another perspective (what you'd expect as a return on your equity as a shareholder), do you still believe it's high enough?
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