If only Ken had vision like this

There must be a deal here for any extra capacity but you can bet Ken & Dave will stuff up any chance of a deal.
Cheers
Hot legs
Today's AFR story on min
Mineral Resources managing director Chris Ellison said the company is looking to move away from iron ore mining and reinvent itself as a pure mining services company with the construction of a monorail in the Pilbara.

Mr Ellison said the company had patented its own elevated rail system, being designed in China, and hoped to commence the construction of a line from Port Hedland port to BC Iron's Iron Valley mine in late December.

"It's a transport system somewhere between a monorail and a train. It's an elevated track that sits on piles up in the air," Mr Ellison said. If it transpires, the system would be the first of its kind in the Pilbara.

"The purpose behind that is we want to connect our inland to the supply chain we have on the coast and we need to get a transport system that can put iron ore into China for the bottom quartile cost; less than $US45 a tonne landed in China," Mr Ellison said.

"This technology is able to be used on coal, on any bulk commodity, on wheat, on grain, anywhere there is a continuous quantity to move so this is going to be a big part of our business going forward. It allows us to offer a complete supply chain solution from the pit through to a ship."

Mr Ellison said the initial 330-kilometre line to be built at Iron Valley, as well as the supporting transhipping infrastructure hoped to complement it at Port Hedland port, would cost between $700 million and $800 million dollars and have the capacity to transport between 30 million and 40 million tonnes of ore a year.

PAC Partners senior resources analyst Andrew Shearer said, based on these figures, the capital intensity of the monorail would be around $2.1 million to $2.4 million per kilometre compared with around $6 million a kilometre for conventional rail.

Mr Ellison said the decision to focus on the bulk ore transport system business and its other mining services arms meant the company had decided to gradually divest its interests in its iron ore mines.

Mineral Resources owns the Carina mine in Western Australia's Yilgarn region and is looking to expand its operations there. It also operates the Iron Valley mine for BC Iron.

"The future strategy for us in the medium term is to progressively divest our interests in any ownership of iron ore," Mr Ellison said.

"We brought in this build-own-operate process a long time ago and it has served us extremely well but we are getting to a saturation point with that in the market where it will only incrementally grow. But if we can bring together a whole of mine package … that gives us a much better position [as] a pure mining services contractor."

"We believe there is a big opportunity here with the major miners where we can go to the stranded deposits they own that are 50 to 100 kilometres away from their current supply hubs and we will be able to work with them to provide those kind of transport and crushing opportunities."

Mr Shearer said the moved showedthe company'sability to think outside of the square and adapt to prevailing market conditions.

"At thisearlystage valuing the planned new directionis challenging, however, wedo see potential – if the rail system is successful – in not only reducing operating costs at Iron Valley but also for the technology to be used for a number of different bulk commodities in regions outside of the Pilbara, such as coal andgrain," he said.

"There area number ofcompanies in the Pilbara withstrandedprojects that could benefit from this transport system, such as Flinders Mines and BC Iron."

The change in direction was revealed in a call to discuss the company's first-half results.

Mineral Resources said its mining operations have remained cash flow positive despite the crashing iron ore price, with Carina making a margin of about $5 a tonne and Iron Valley margins closer to $18 a tonne.