Labor's $1b hydrogen plan zeros in on Qld, page-55

I'm not sure there's too much cause for concern, at least nothing a bit of pragmatism can't get around - and hopefully has already. It doesn't seem logical that we should feel punished as a result of a deal. Then again, I've no idea what machinations go on behind the scenes.

I had a look back at the December 2017 binding deal announcement with MIN. It says that Hazer should be able to expect a royalty as soon as the first sale of graphite takes place (to me this clearly means the Stage 2, 1Ktpa plant, described as a "commercial-scale plant" in the same ANN):



But then comes a dose of uncertainty from Hazer's royalty rate clarification in January 2018:



So, on the one hand, MIN is apparently going to pay Hazer from the moment it starts selling graphite. But, on the other hand, we know that there will be various deductions due to operating and asset costs.

I've also assumed previously that we'd have to sit out from any revenues until the costs had been cleared. But, if that really was the case, these December and January statements would contradict each other.

So, is it not more likely to think that the costs will be spread over the lifetime of the plants instead? This would allow Hazer an income from the first graphite sale onwards.

This info has been out since last January. I'd wager many more people have found this an acceptable deal than than a bad one.

MIN picks up all the costs of development, not Hazer shareholders. A 15% royalty seems likely, minus some costs from the first sale onwards. (Our shareholder base is a also lot smaller than MIN's, so it doesn't seem an unreasonable piece of the pie.)

The deal also provides a potential outlet for graphite produced by any of Hazer's future partners, giving us the same royalty on the finished graphite. And, if Hazer does decide to just go it alone, is there any reason Hazer couldn't provide graphite to MIN for purification on the same terms?

There's seems to be some pretty big potential, all told.