Morning Sabine! As background, I held MIN, NRW and some other...

Morning Sabine!

As background, I held MIN, NRW and some other mining services in the last mining boom. Made money selling MIN well, lost money on one that went broke and I’ve ridden the dip and then reinvested more on the way up with NRW. That experience has led me to try to be more wary ... I don’t want to be just buying/selling the sector at the right times in the mining cycle but prefer to look for companies that have business models that can weather the storms/cycles.

NRW fits this bill as they’ve now built a substantial business in govt infrastructure (that’s counter-cyclical to their mining infrastructure/services). MIN have taken a different route with relatively stable BOO revenue/ROI for ‘life of mine’ complementing very high (and lumpy) profits from their mine development/partial sale/lockin BOO model. Benefits of this are a relatively stable cash flow, high upside from development profits and an engineering arm that sees a broader picture, bringing in new innovations for MIN’s BOO and mine development businesses.

Re the non-standard rail project.... I’ve seen the Sydney North West Rapid Transit consortium completely re-design track design. They’ve upset a number of rail contractors but seem to have taken a lot of cost out by using their own slab-track design (still standard gauge tho). I really don’t know anything about MRL’s ‘innovative rail system’ other than what they’ve provided ... however, from the NWRT experience I do suspect that there is room for challenging the status quo and taking costs out.

As to whether NRW/MIN would be good JV partners? I really don’t know. However, I think they’re both companies with good business brains in addition to good engineering/technical brains.