Slight TIC beat

Research evidence excerpt

Slight TIC beat

Macquarie Equity Research Dalrymple Bay Infrastructure

Key Risks to Investment Thesis Company Description

• The major risk is the movement in the 10-year bonds, DBCT is a lower risk business model, compared to other

impacting the discount rate and valuation. Medium term, regulated coal chain assets.

the timing of NECAP investment will influence the growth

It holds a 50yr+49yr lease over the terminal from the outlook.

Queensland government with first expiry in 2051.

• By 2031 there is a renegotiation of the access pricing.

Miners have explicitly highlighted they do not like the light It provides ~84mt of coal loading infrastructure to miners in

hand regime. Possibly signalling the potential direction is the Goonyella corridor. It is open access infrastructure, with

QCoal application to re-regulate NQXT, a competing port. demand for the infrastructure currently exceeding capacity.

At this stage we do not think the case has been made. The Goonyella corridor is principally a metallurgical corridor ie

coal used for the reduction of steel. Metallurgical coal demand

• Finally, long-term risk is the technology evolution around remains robust until technology can lower the cost of green

blast furnaces and whether it can successfully eliminate/ steel to be a substitute to the current process.

reduce metallurgical coal.

Operational risk at the terminal is negligible, with the coal user

group being the managers/operators of the terminal itself. DBI

is simply the provider of the infrastructure.

Revenue for the business is based on a TIC (Terminal

Infrastructure Charge). Originally it was based on a heavy-

handed regulatory regime administered by the QCA similar

to AZJ below rail business. The approach limited innovation.