True, I too thought that margins will be tight with this one....

True, I too thought that margins will be tight with this one.

Still this makes sense.

For one, the cost of port operations will go down if volume goes up. There are a lot of fixed costs invoved, and the cost of labor and other variables is likely to go down with volume. I think that if they really ramp up to 10 million per year the cost may move from 6.75 AUD per tonne to less than 4, maybe less than 3 AUD. Size matters here.

The inland port, once it is open, will offer benefit not only for this contract.
Hope they will be able to switch from road to rail transport. That will offer potentially much lower cost. It is also more environmentally friendly. And rail helps to utilize port capacity better. And then there is the idea to blend ore with higher iron content with lower grades to improve aggregate market price.

In total, I believe this is promising news.