Cost discussion, page-106

I noticed the MIN Managing Director’ AGM Presentation our today.  It’s good to see what a “can do” company does to keep their shareholders informed.  Of particular interest to FMS shareholders are the revenue and cost if their IO operations that use inefficient road haulage (compared to rail).  See slide 8

Export 9.3Mt, average revenue US50.1/t (approx AUD $69.64), CFR cost AUD $63.9

That would leave a small margin of A$5.74.  Needless to say that rail operation moving 45Mtpa would have substantially lower CFR cost.  BTW 45mtpa @ $5.74 = over A$258m per annum!  My mind goes back to that BBI presentation to the KCCI in June.  That showed cost of approx $30/t if I remember correctly.  Do the maths and you get big numbers.

Also see slide 16 Pilbara Infrastructure Project.  Note the CAPEX A$1.4-1.6billion.

Then have a look at slide 17 Kuomintang IO Acquisition (BCI)

Finally take a real good look at slide 22 Bulk Ore Shuttle System (BOSS).  Design just finalised.  FMS really should be looking at this IMO and choose between two proposals.  One from MIN and the other from BBIG. Take note David!

Here is the link http://clients3.weblink.com.au/pdf/MIN/02050782.pdf