Things are hotting up in the Pilbara for sure.Aurizon (former QR...

Things are hotting up in the Pilbara for sure.

Aurizon (former QR Rail) want a toehold in the Pilbara through a Port Hedland port/rail solution, and Brockman and Flinders join forces to jointly market tonnage for transport.

3 year horizon for Aurizon to come up with a solution for Brockman/Flinders, and looking at potential paybacks Aurizon needs to attract around 40mt pa to make an investment economic. Roy Hill remains the dark horse and whether their quest for their own rail can be combined with Aurizon to give them scale.

Could be a hard task, particularly with the cost invovled in a new berth at Port Hedland and rail (min $5b).

At the very least, and with rumours that Brookfield were looking at the FMG TPI sale, it means that the big infrasturcture players are still interested in the Pilbara, the export hub of Australia. The rumours of the death of Aussie iron ore have been way overstated.

And timely to remember Alwyns quote in the WSJ in March:
“We also need to remain open minded to alternatives,” he said. “The alternatives include private equity investors, and some of the larger engineering firms are expressing interest in a build, own, operate solution.”

All these developments and the appetite for deal making in the Pilbara makes me more confident that IOH can get a deal done on Cape Preston. Particularly given its low cost quick to market attributes while other juniors still dream big with longdated projects.