Agree. Morningside's fair value estimation of 6.60/share has always been based on their belief that the smelter will continue to operate
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Lol - smelter management now saying there is a chance they remain open “if they get the right electricity price”
https://www.interest.co.nz/business/...its-doors-open
Will they really close. Have you gone to mico wakefield and tried to buy some extruded aluminium. Need a wheelbarrow full of money. Must be a profitable industry.
If i was selling electricity I wouldnt undercut the market, just let the water go over the spill way and wait untill demand/population increases.
"NZAS has estimated it would cost about $256m to meet its obligations to clean up the site after decommissioning the smelter.
Woods said the Government expected Rio Tinto would meet its obligations for clean-up of the site and do the right thing on the dross."
"expected" .I am very doubtful RIO will honour the remediation. Is there no funds locked in to cover this as in many mining companies have to do for remediation when mining is finished. They renneged on the dross disposal, they will get away with minimal remediation too imo.
Tiwai Point to close, 1000 jobs to go
I don't think the mining companies have to have funds on the books either for remediation. Its just listed as a liability but sometimes funds not there to cover for it. It is an important issue that future govts will have to grapple with and possibly change laws to make sure money is tied up for such an occurrence.
Maybe sometimes deep analysis can be too confusing. I remember working for a landlord whose tenant (pet food manufacturer) moaning about high rent when they werent profitable. Delving into their accounts, they were buying ingredients from associated companies at some standard costing, thats where their profit went. Completed aluminium products arent cheap. Maybe their raw materials purchased from Mummy and Daddy are way overpriced. Tiwai never meant to make a profit. I have heard Tiwai moaning about their loss making business since they first started. Seems to get their power cheaper though. More you moan the more you get.