Hi all,I agree that PSI's input on coal quality is useful info....

Hi all,

I agree that PSI's input on coal quality is useful info. PSI has also made it clear that coal quality is very different from the economics of the project. It is clearly an input into the economics. However, without the other inputs to determine the viability of the project, unfortunately people might take this one input as the 'be all and end all', which it is not. What really counts is the margin.

By way of an example, I'd rather own and sell 1,000,000 Toyotas and make $1,000 on each sale than own 10 Mercs and make $10,000 on each sale.

PSI posted back on 16th December the following:

"If the coal is shallow enough and in thick seams it can still be economic to mine - that's what the Victorian lignite mines are. It just makes it harder, obviously, if you're only getting $50 a ton instead of $120."

For me, the more important question (assuming PSI's $50/tn is a reasonable/rough estimate), is how much will it cost to get the coal out of the ground and over to the Chinese boarder? At half a billion tonnes of JORC on 16% of the license, even a small margin would create a lot of value.

This project was never intended to be a coking coal play. It has always been a scale play (lower margin and higher volume).

Even the highest quality coking coal projects can be uneconomic to mine. Furthermore, if MOU's project was a coking coal project with this amount of coal, I can't imagine that MOU/TVN would ever have been able to afford the project in the first place.