Edison Report, page-3

well, as soon as I read the original ASX release about the broad terms of the Alliance Agreement, I felt the terms were very expensive for FMS.
It seems FMS picks up all the Operating Costs for Rail and Port, PLUS the Access Charge PLUS the Profit Share (30% over A$60/tonne)

So it seems to me that FMS is expected to cover the Operating Costs of both Port and Rail - these costs may well be unlimited - ie what happens if RTA as Operator or whoever, are inefficient?? Operating cost Risk is usually a risk of the supplier!
The Access fee of $20/t seems to me to be a charge designed to cover the Cap Exp costs of the Port and Rail.
The profit skim seems to be RTA taking a bet both ways. 30% over $60/t seems a big amount. $60/t does not seem to be a big hurdle, even tho I/o prices are taking a hit.
It just seems to me that FMS are so desperate that it is FMS taking the funding risk for RTA's infrastructure.
So two big issues:
- if FMS pricing is high, it is imperative that the FMS Board keeps Todd at bay in any pricing discussions with the BBI J/V (ie potential conflicts of interest)
- also, FMS need to keep investigating alternatives to BBI j/v.

I guess it all comes down to pricing - will FMS make enough money out of every tonne mined and delivered, to warrant the investment in PIOP, the funding costs, and a decent return???
Or does FMS just end up taking all the risk for RTA/Todd such that those entities make the bulk of the profit ????