It's not only the BRM holders they're trying to rip-off, it's almost certain that they're trying to rip off the Australian people by avoiding the MRRT.
It's all fitting together now. They claim that gaining funding out of HK is impossible under joint BRM/WNI structure, so it can only be WNI. They only want Chinese steel firms and infrastructure builders involved in the project - not iron ore traders such as Sinosteel.
To avoid the MRRT, amongst these China Inc 'enterprises' they'll devise some sort of convoluted funding arrangement where the ore is in effect sent to China at a price that doesn't trigger the MRRT. Chinese steel mills get ore cheaper and dump Chinese steel products with a greater profit margin.
WNI gets a portion of the profits from their Chinese steel mates. WNI shareholders still benefit by getting some dividend. China benefits by getting taxes from WNI, WNI shareholders (mostly Chinese) and Chinese steel mills. Australia loses out on the MRRT and in the longer term once China Inc owns many more ore producers based in Australia, iron ore prices pushed down to stuff BHP, Rio and FMG.
The MRRT is a politician's folly. Would have been better for the Australian Government to have say a $30 per ton export fee in addition to State royalties. That way Australia benefits the moment each ton leaves the shore and removes the ridiculous accounting complexities of offsetting infrastructure costs against ore income. Means the Chinese are paying for the ore instead of virtually stealing it. Ore processed in Australia would not attract the export fee.
BRM Price at posting:
$2.05 Sentiment: None Disclosure: Held
