As there is not much information coming out about the JV, let's...

As there is not much information coming out about the JV, let's try to imagine what kind of issues HAW and LCY would be facing if they decide, as apparently seems to be the case, to develop Mt.Bevan as partners in a JV.

As we all know, HAW's share in the costs and in the rights to its mining output (note that I am not saying profits) is 40% and LCY's 60%. Notwithstanding this asymmetry, both partners are supposed to have an equal saying when it comes to the way that the JV is to be run. In addition, HAW is free to negotiate off-take contracts for its share in the mining output.

The first thing that would have to be negotiated would be, of course, the legal structure for the JV. And when it comes to this it is obvious that the current structure cannot hold. As a matter of fact, although it is possible in principle for HAW to become the legal owner of 40% of the trucks and LCY the legal owner of the remaining 60%, such arrangement would be unimplementable.

Therefore, the most likely choice would be for the leases to be transferred to a company having as exclusive objective the development and exploration of the Mt.Bevan project. Let's call it Mt. Bevan Limited and allocate 40% of its capital to HAW and 60% to LCY and provide equal representation to the board for both members.

Let's imagine now that HAW manages to negotiate prices for its share in the output of Mt. Bevan Limited that are higher than those negotiated by LCY for its 60% share(read its exports to NMCD's mother company in India).

Of course that such a situation would be intolerable to HAW. Therefore one has to conclude that HAW and LCY can both share the costs but not the profits a fact that implies that the output from Mt. Bevan Limited has to be sold at a fixed price to both LCY and HAW for the purpose of its eventual resale by these two companies at whatever prices they manage to get.

Alternatively, if they both want to share the profits then Mt. Bevan Limited must have recourse to an independent body specialized in the negotiation with whoever is willing to pay more of all off-take contracts, a situation that for sure would be intolerable to NMCD, a firm looking above all for long-term security of supply.

Cheers.