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Thread: Power shares

  1. #41
    The Kid
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    Quote Originally Posted by Arthur View Post
    Hope never to check either of them myself, but he showed all the balls of a gelding when he folded to Rio's "Bluff"
    Can't see the Government caving in to Rio Tinto this time. Southland is a true blue National seat (so there's little for them to lose in the way of votes) and the Greens will look at this as an opportunity to shut down all the dirty thermal power stations.

  2. #42
    percy
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    Quote Originally Posted by couta1 View Post
    That sounds very much like a code that you've sold your holdings.
    Cashed up to buy your PAZ shares.?

  3. #43
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by percy View Post
    Cashed up to buy your PAZ shares.?
    Yes please !
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  4. #44
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    Tiwai have exceptional security of supply and that requires a lot of xtra transmission assets specifically put in for them. They pay 5.5c/Kwh which must be about cost for energy and should not get reductions for transmission. They have to be faced down. Their profit all depends on the bauxite price which they control so it is a question of transfer pricing . This is written by an x TP CEO and senior manager of NZED in Dunedin who had a lot to do with Comalco . Remember Muldoon doubled the price a long time ago . You have to be tough with them.

  5. #45
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    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  6. #46
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    With all the Council's declaring Climate "Emergencies" if Labour/Greens return it might be an opportunity for them to turn off fossil fuels too. If the children mining the cobolt can keep up we could all be electric in no time.

  7. #47
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    Quote Originally Posted by horus1 View Post
    Tiwai have exceptional security of supply and that requires a lot of xtra transmission assets specifically put in for them. They pay 5.5c/Kwh which must be about cost for energy and should not get reductions for transmission. They have to be faced down. Their profit all depends on the bauxite price which they control so it is a question of transfer pricing . This is written by an x TP CEO and senior manager of NZED in Dunedin who had a lot to do with Comalco . Remember Muldoon doubled the price a long time ago . You have to be tough with them.
    Sorry I can't find the link to the article yesterday, I did try. The nub of the issue is that Rio believe the $66m they pay in transmission costs each year, (which absolutely dwarfed their net profit) is more than than the total capital value of the transmission assets used. I have no idea as to the validity of their claim but its not far as the crow flies from Manapouri to Invercargill and if there is substance to their claim that they are effectively paying more than the capital value of the asset every single year just to use it, then obviously that's a completely absurd situation. Rio went on to say in that article that their transmission charges are ten times higher than the average for other smelters around the world. On the face of it you have to wonder a bit if the transmission pricing review, (which will grant them as I understand it, about $11-12m relief per annum next year and a similar amount again on top of that per annum from 2024, went far enough and was fair ?
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  8. #48
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    Quote Originally Posted by Beagle View Post
    Sorry I can't find the link to the article yesterday, I did try. The nub of the issue is that Rio believe the $66m they pay in transmission costs each year, (which absolutely dwarfed their net profit) is more than than the total capital value of the transmission assets used. I have no idea as to the validity of their claim but its not far as the crow flies from Manapouri to Invercargill and if there is substance to their claim that they are effectively paying more than the capital value of the asset every single year just to use it, then obviously that's a completely absurd situation. Rio went on to say in that article that their transmission charges are ten times higher than the average for other smelters around the world. On the face of it you have to wonder a bit if the transmission pricing review, (which will grant them as I understand it, about $11-12m relief per annum next year and a similar amount again on top of that per annum from 2024, went far enough and was fair ?
    Yeah but the problem is that Tiwai rely on more than just the assets from Manapouri to Tiwai. For example, if there was an issue with the lines to/from Manapouri, or if there was a temporary issue with Manapouri output itself, Tiwai would still be handily supplied by power from elsewhere on the grid. When the South Island experiences sustained dry hydro conditions, power flows south from the North Island to supply Tiwai and other South Island consumers. Their arguments seem clear and simple until you look at it more closely and realise that they are beneficiaries of an interconnected grid. If this were not the case, Tiwai would be free to purchase the assets between them and Manapouri and disconnect themselves from the rest of the grid. In fact, the Electricity Industry Participation Code allows for discounted transmission charges if you could prove this ability to go "off-grid". The fact that Rio have not even remotely suggested this as a possibility kind of proves my point.
    Last edited by Airw0lf; 24-10-2019 at 07:28 PM.

  9. #49
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    One further point - if they do decide to cease operating the smelter, it's not as simple as just walking away. If I remember correctly the exit costs are quite substantial (tens, if not more, of millions) - there's a fair bit of remediation work they need to do on the site. I stand to be corrected on this though as I am not an expert on the resource consents and such that they operate under.

  10. #50
    ShareTrader Legend Beagle's Avatar
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    Fair enough AirwOlf, its certainly a complex situation. The Government probably need to have a think about the bigger picture and what the cost is if a fair percentage of those 1000 workers end up on a benefit. Maybe some pragmatism is called for ?
    Last edited by Beagle; 24-10-2019 at 08:24 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

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