Have locked in the MEL bounce just in case - Money in the hand...
Printable View
Tiwai closing is the best thing for all the electricity companies and NZ You cannot sell a product below cost and that is what was happening with Tiwai if their was further reductions.
I remember hearing that the funds for site remediation were put into some sort of escrow when they built the place, and that remediation was a condition of the plant closing. It's actually quite a picturesque place with the exception of the plant itself and the access road to Tiwai is a nature reserve. Maybe there is some potential for a tourism operation there
If I'm not mistaken - is the Tiwai Smelter not structured as tolling Processor ?
The raw product belongs to Rio Tinto - does it not ?
If this is the case - why isn't a processor profitable - assuming it gets to process economically viable volumes ?
Correction to my last, there are no funds put aside, but the remediation costs are backed by site assets as attached:
"NZAS’s financial statements include a provision for rehabilitation and closure of $226.8
million as at 31 December 2011. Meridian has tested this figure with external parties
and it is seen to be a reasonable estimate of what likely closure and remediation costs
would be. However, this provision is not backed by a cash reserve and only the assets
of NZAS (mostly plant) support it." - from a Treasury release dated September 2013
RIO
Please clean up before you go
https://www.scoop.co.nz/stories/BU18...rs-actions.htm
https://www.tvnz.co.nz/one-news/new-...minium-smelter
The changing face of the mayor of our Southernmost city
Morning of 8th July: Tim Shadbolt
:t_up:
Morning of 9th July: Tim Sadbolt
:t_down:
I have to admit I am surprised that Rio have pulled the plug on Tiwai. I really though that the 'purest aluminium in the world' would ensure the premium price needed to keep the smelter viable. I guess the global outlook for aerospace just isn't so rosy at the moment...…
Still at least my 'value buying approach' has seen that I have not kept chasing up buying those power shares to ridiculous prices. I will have to look at the value equation again now. But my gut feeling is 'we aren't quite there yet'.
SNOOPY
It would be interesting if you had the time and could access financial statements for Tiwai Point to see if they are paying fair prices for their other inputs. Rio Tinto would be providing the Bauxite (I guess) I don't suppose they would be using transfer pricing to take profits offshore. What about debt, do they have any? is thin capitalisation an issue. I guess pointless now but if you had the time it would be interesting to know. I'm sure if that were the case someone would have brought it up by now while they debate the price of power.