Mining contracts typically have a Minimum Take Or Pay (MTOP) component so that the contractor going in has at least enough income to warrant their commitment. KML will be paying whether they utilise a little or a lot upto a certain point of production then it reverts to a cost on usage.
Think of the many and various components going in.
The obvious: Mining services, power, trains, port.
The less obvious: Messing, accomodation, cleaning, flights.
As well as a core of employees on healthy wages, whether they are flat out or standing around.
cheers Surly
GBG Price at posting:
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