Oz,
You need to do deeper research if you are seriously interested in this project.
You are showing your bias and ignoring the data in my responses to you.
CBIX, includes historical data for real freight rates....includes real data for bauxite prices in China including moisture etc etc. (I'd recommend spending some time examining the site, buy a subscription, before you dis it).
eg from the site "Each CBIX value is a 30 day rolling, value in use, trade weighted, average price of a representative sample of bauxite imports into China over the period"
Rail, Canyon will be a client of the rail operator and will not have to 'capitalise' anything. There will be a freight contract/fee per tonne, simple and no upfront costs involved.
Bel air data supports my argument, it doesn't detract from it (and fully aware of their costs etc).
A quote from your reference:
"Bel Air Project Highlights:
- A technically robust open-pit project that offers low capital and operating costs, rapid payback and strong financial performance at current bauxite prices;
- Twin development strategy allows fast track to 4.8 Mtpa production for immediate cashflow generation;
- 12 month initial construction phase; first production targeted for January 2016;
- Ramp up phase to 10.3 Mtpa maximises throughput and reduces operating costs without disruption to production; and
- Includes development of dedicated export loading jetty infrastructure for transhipment of Direct Shipping Ore ("DSO") to Capesize or Panamax vessels.
Bel Air Economic Highlights:
- Post-tax internal rate of return ("IRR") of 72%;
- Post-tax net present value ("NPV") of US$766 million (at a 12% discount rate);
- Initial construction capital requirement, including financing costs, of US$110 million;
- Peak fundraising requirement of US$120 million with post-commercial production capex largely funded by internal cashflows;
- LOM cash operating costs of US$22/tonne free on board ("FOB"); and
- Breakeven price, including working capital, in-country taxes and royalties of US$25/tonne FOB."
and a reason why with the above operating costs and
the need to trans-ship to a cape sized vessel 32 kilometres off shore/end of loading ramp, power onshore by diesel, triple handling and still achieve those economies arguers very well for an operation that direct loads at port. ie Canyon.
also from your link
"Onshore infrastructure includes:
- A self-contained camp and operations centre
- Water wellfields which have been identified and designed
- Power obtained by diesel generators
- Dedicated communications and internet
Transhipment is the optimal method for bulk export from Bel Air
- Transshipment involves the loading of bauxite into barges at a barge berth at the end of a causeway
- The causeway is a simple geotechnical structure placed on bedrock (1.4km long, -3.4m CD) which provides access from the shore to appropriate water depth for a barge load-out berth
- Self propelled barges then transport the ore to an Ocean Going Vessel at the Transshipment Zone, approx. 32km offshore
- A Transhipment vessel then transfers the bauxite from the barges to the OGV
- This provides an optimum balance between low capex, simplicity of operation and functionality"
Happy to stick with Canyon's likely infrastructure solution and lower reactive silica.
(20min delay)
