Hi JB It depends who is paying the subbies i.e. the blokes...

Hi JB

It depends who is paying the subbies i.e. the blokes physically transporting PASS and then backhaul with sand/gravel.

In the Dec 2015 Quarterly, Mike says:
"If Melbourne landfills could take some of the PASS from the new developments, the cost to the developers would be over $150 per tonne plus around $15 per tonne for trucking. The cost of trucking to Nagambie is around $25 per tonne, giving an additional trucking cost to Nagambie of around $10 per tonne.

Nagambie Mining considers that, if it bids commercially less than $140 per tonne to store PASS under water, it has the capacity to build up to and accept an average of around 1.0 million tonnes per year over a 6.2 year life."

Here we can probably assume JH is bearing the burden of paying the $25 for trucking. So little impact re: my point about the Cash Conversion Cycle.

In the latest Annual Report Mike says:
1. "Vision to be a Significant Sand and Quartz Aggregate Supplier"
2. "at minimal transport cost"

This indicates the transport burden is with NAG. So it may come down to:
1. What is the definition of "minimal"? Usually back haul is significantly less as the marginal cost to the truckie is minimal. But...
2. Will JH see an opportunity to lower their transport costs by pressuring the truckies to spread their $25 fee + minimal back haul with NAG? Maybe. If I am a JH negotiator looking at the big picture, this is what I would do.