rail/port suggestion

We are all eagerly awaiting a “rail deal” to be announced and from AGO’s own announcements, it would seem that their port capacity allocation is pivotal in this outcome.

But as we know the State Govt has made it clear that the port allocation isn’t transferrable to the “big players”. So how do they work this? Obviously they have Cheryl Edwardes who will be very useful in working out a way around the port allocation, but here is my take on it. It might sound silly, but is it…….

Let’s say the mystery partner is FMG.

FMG can’t ship 20m tonne of ore out of AGO’s port allocation, but AGO can. If AGO buy 20m tonne off FMG, it would become AGO’s ore and they could then ship it out - as it is ‘their’ ore. They would pay ‘full price’ (that FMG would normally receive) or even a premium to the price. In return they can rail ore on FMG’s rail line to port. The premium would basically equate to the freight charges per tonne, to use the rail.

So it is kind of like “Buy any full price tonne of ore and we’ll rail a tonne of ore to port for free”. Or, “Receive a one tonne rail coupon on the purchase of any full priced ore”.

FMG get to ship out more ore from a congested port. AGO get to rail their ore. And there is no change in port allocations from the minor players.

Could it be done?