i/o juniors win right to bargain on rail, page-8

Hi Westcott,

It's a sub-optimal set of circumstances that put us in the position of choosing a more expensive rail option (TPI or some variant of "Stand Alone")than the most cost effective and efficient one available i.e BHP).

I was talking to a friend yesterday who is also an investor in BRM, and his take on the issue was that the fault lies not so much with BHP, (being a private & self interested corporation that will seek to maximize long run profit and its competitive, regardless of any wider industry good or public good) but rather a failure of the regulators and of enforcement.

As far as the latter is concerned the ACCC's shot yesterday is a harmless thunderbolt - we have to wait & see if there is anything more powerful coming from the ACCC.....but time is not on its or BRM's side.

Notwithstanding my vexations about BHP, I have always thought we would wind up going with TPI. It will add significantly to our foundation capital costs, but given the long term profile of Marillana, it can be easily amortized over a long mine life.

What is not preferable is that we keep on trying to get onto the BHP line such that it impacts out timeline & critical path to production.

I don't think BHP will get off scott-free either. They have not made many friends in the sector or in government - I hope all stakeholders will have a long memory next time BHP needs a favour.