court mediation 8 may 2014, page-3

This from yesterday's AUSTRALIAN...

PILBARA developer Brockman has fallen off the radar of local investors since the Hong-Kong based Wah Nam assumed control in late 2012.

One reason is that Wah Nam (since re-named Brockman Mining) has been derisively referred to as a limousine business, but in fact it has exited the upmarket people-cartage game in favour of developing the 1.6 billion-tonne, $2.2 billion Marillana project.

The key is to access For­tescue’s rail network to deliver the coveted ore to Port Hedland, where Brockman has a 50 million-tonne port entitlement.

The parties today start ­mediation proceedings on such access, which will make the difference between Marillana being worth billions of dollars, or just another stranded Pilbara deposit.

The argy-bargy comes at a timely juncture, given rail operator Aurizon’s intentions to build an open-access rail-port network, using its joint bid for Aquila Resources as the spearhead.

The prospect — or threat — of an alternative rail line shouldn’t harm Brockman’s negotiating hand.

Brockman is seen as having a good chance of success because, unlike the BHP Billiton and Rio Tinto lines, Fortescue’s rail is subject to a WA railways access code.

Given that, we rate Brockman a spec buy, admittedly an about-face on the avoid call we had on Tuesday.