Ann: Agreement Signed To Develop Mongolian Rail Infrastructure, page-3

I'm a LT holder, but I'm not sure what this means for AKM. It sounds like the Russian/Mongolian JV will now be the ones building the Erdnet to Russian border rail line (not AKM's Northern Rail) - why would the JV want to complicate things by having AKM/Northern Rail involved? The JV can raise the money easier than AKM and surely they'd want control over this important new line right from the start.

So ...

Plus: AKM would not have to pay for the building of the line.

Minus: The Russian/Mongolian JV would decide when the line is to be built (and the Trans Mongolian line would get priority) and the coal can't be shipped in worthwhile quantities until the line is built. And, instead of AKM making money out of the line, they'll now have to pay the JV to use it at a rate decided by the JV (that will upset the feasibilty numbers since they were very marginal anyway).

AKM always wanted to own and control the line; now it seems (to me) that they won't. And it gives the Russians the opportunity to squeeze AKM (via freight quantities and rates) before someone like SUEK makes a TO offer.

ATM the market sees this as a positive step. I hope that continues.

Other views?