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27.5¢ magnetite mines limited.

the pipe line is not to be shared, if MGT needs pipeline as...

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Suwang

2,197 Posts.

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23/06/22

19:58

Post #: 62171876
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Originally posted by HAW22BH: ↑

That is where you need to understand how these things work as it won't be HIO servicing the pipeline.

The 3rd Party will build the slurry pipeline AND maintain it. They will then will charge HIO "Rent" per tonne of IO being sent through the pipeline over a period of time (X amount of years). In the contract, I have no doubt there will then be "an option to buy the asset" after X number of years.

The CAPEX to build the slurry pipeline will NOT be HIO - however the contract with HIO (and it's exceptional economics) will allow the 3rd party to get finance to build the pipeline in the first place.

Right now, no other project is as far advanced as HIO, to get this in place for a 3rd party and this is why it's no doubt going to become a SA Major Project.

At the end of all this, other companies (MGT for example!) will be able to tap into the existing transport corridor, to get their mine up an running, paying "Rent" to the 3rd party, then ultimately, down the track - to HIO......

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the pipe line is not to be shared, if MGT needs pipeline as well, they need to rent their own, that is my understanding after reading the pipeline post in HIO thread, how can companies share a pipeline, today HIO send their slurry, and tomorrow MGT's turn?

MGT Price at posting: 2.1¢ Sentiment: Hold Disclosure: Held
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