Brockmans performance over the past financial year has been very...

Brockmans performance over the past financial year has been very impressive. It remains a concern however that a rail solution has not been negotiated. I understand WR like many will be waiting for the Australian Competition Tribunals decision on rail haulage. I still think unless BHP and RIO believe their proposed IO JV would be jeopardised by a shared access decision, an appeal would be inevitable. The BHP option seemed more likely for BRM if Colin Barnett had enforced some form of junior rail haulage as part of his recent state royalty negotiations with BHP/RIO. Nothing was forthcoming even after his comments from earlier in the year stating 10% of rail capacity for juniors was fair!

This most likely leaves FMG and thankfully also Hancock with their rail/port plans for Roy Hill being approved recently. Both these options would probably lead to an equity deal involving a stake in Marillana for rail haulage. WR had said on a recent BRR interview that he would be prepared to lose 50% of Marillana. Thats a big price to pay, but 50% of something is by far better than 100% of nothing.

Some people think the NWIOA could build their own rail. This is the least likely and would obviously see a delay in the forecast production timeline and far greater CAPEX for the NWIOA members and their projects.

Without some form of a rail haulage agreement BRM literally have 100% of nothing but a dream. I still remain optimistic that at the very worst WR will negotiate a 50% equity deal for Marillana based on gaining rail access. My confidence is supported by the very strong performance of management this past financial year. I hope my optimism is justified.