Anthony, I personally think the major issue is that this mine...

Anthony,

I personally think the major issue is that this mine needs the price of IO to stay consistently above US$80 for it to be profitable enough to maintain the plant and maintain it's rather large debt pile. The debt/ton ratio on this thing is enormous, significantly more than anyone else out there, the premium just cannot make up for it, there simply isn't enough margin in comparison the peers to pay for the infrastructure. The fact of the matter is that $1.2 bn for 8 mtpa with rail, port and power infrastructure for 16 mtpa the debt was ok. That blew out by another $500 m and commissioning blew out on the timeline meaning this missed a big high price cash payday.

Unfortunately it just costs too much to mine and process this ore and the premium cannot cover those additional costs. C1 is 5x that of FMG, BHP, RIO and Vale and KML picks up a 7% premium to the 62% price, the numbers just don't work. The majors can also bring on over 500 mtpa at low capital costs at C1s of around $15/ton. I think the board has left it at zero because they realistically know what is out there, how much KML is costing and the environment it needs to be successful and they just cannot see it happening for a prolonged period of time.

I'm hoping they have found some cobalt, graphite, lithium or something more worthwhile than IO. $40 million is enough to get a decent high value mineral asset out of the ground!!