Let's talk about nonsense shell we? You believe that transporting HIO's ore to port via a slurry pipe line will reduce the OpEx (operating expense) by 60 to 70% compared to using rail??? so overall transportation cost (to port) is more than 60 -70% OpEx? That statement is ridiculous!!
If you meant to say the OpEx transportation costs to port will be reduced by 60-70% that really isn't much. I would estimate rail cost to port would be around $4 per tonne. So you save $2.40 to $2.80 per tonne x 11 million tonnes per year = $26.4 to $30.8 million per year savings less the cost to operate the dewatering plant, power to run the pumps, cost to maintain the pipe, etc, etc..... Also adds huge CapEx requirements to build the pipe in the first place and a dewatering plant....What do you think the ROI will be on the slurry pipe?? 10 years 20 years, more maybe?? Why go to the expense of building a slurry pipe at stage one on the mine when there is a rail line so close???
Maybe BFS 2.0 will suggest that high grade pellets are the way to go so will need the capex for a plant to transform the slurry to pellets.... more CapEx and OpEx...
Shipping ore from W.A. to China via ship adds approximately $20 per tonne (just for reference).
As for the length of slurry pipe line. I gave an estimate of approximately 500kms. You believe 394 kms yet no discussions or agreements have been entered into with the current land owners??? I suggest 500kms as I doubt HIO will be able to get approval to go in the suggest route.... land owners don't give land access without being well compensated... (more ongoing costs (Royalties adding to OpEx).
If the pipe is 400kms or closer to 500kms it is neither here nor there, the cost will be massive and not required for stage one, save the Capex and use the bloody rail... Oh not an option due to a lack of available volume...
Did you stop to consider why the longest slurry pipe in world (in Brazil) was favourable over a rail line? hmmm, steep terrain, thick jungle, etc, etc... Cheaper CapEx option????
No where have I suggested that HIO will need to fund the port!! If you are going to quote me make sure you keep to the facts....
Think of it this way, if the port does not get built what happens to HIO? There are many options the S.A. Government can back including the cheaper option of up grading existing infrastructure.
I did suggest HIO will need to build a dewatering plant close to the port. How much will building the plant add to CapEx and how much will the running of the plant add back into the OpEx???
The nonsense all investors should worry about is the HIO marketing spin.... "Super Grade" what nonsense......
HIO Price at posting:
4.4¢ Sentiment: None Disclosure: Not Held
(20min delay)
