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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
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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
    Doggedly sniffing out more food Beagle's Avatar
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    Quote Originally Posted by percy View Post
    Cashed up to buy your PAZ shares.?
    Yes please !
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  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.

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  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
    Doggedly sniffing out more food Beagle's Avatar
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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 ?
    No butts, hold no mutts, (unless they're the furry variety).

  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 08:28 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
    Doggedly sniffing out more food 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 09:24 PM.
    No butts, hold no mutts, (unless they're the furry variety).

  11. #51
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    Quote Originally Posted by Airw0lf View Post
    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.
    Its an old article from 2015 but states the then past clean-up cost estimate was $200 to $400m. Add at least another 5-years of inflation and these are probably on the low side.

    http://www.stuff.co.nz/business/indu...-district-plan

  12. #52
    Doggedly sniffing out more food Beagle's Avatar
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    I am pretty sure Rio will have a very different viewpoint on the cost of the minimum amount of site rehabilitation that is legally required.
    This isn't their first rodeo in that regard.
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  13. #53
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    Quote Originally Posted by Beagle View Post
    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 ?
    Interesting point. What about the 500 workers at TV3 that end up on a benefit... more pragmatism and government intervention called for? Or is that different? Not that I do not want the smelter to carry on but sometimes we need to look at the bigger picture I feel. 1,000 jobs gone yes, but for the rest of NZ it will be a windfall in lower power prices etc and it means NZ inc will have more energy resource to supply anticipated increase in demand (that is contingent on energy being able to be transported North from Manapouri)

  14. #54
    Doggedly sniffing out more food Beagle's Avatar
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    Good point blackcap. Where do you draw the line in the sand ?
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  15. #55
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    Dairy farmer spokesman on radio said collectively dairy farmers use more electricity than Tiwai and its one of their biggest input costs blah blah .....do they get government assistance?
    “Just consider that maybe the probability of you being wrong is higher than you think.”

  16. #56
    Doggedly sniffing out more food Beagle's Avatar
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    Quote Originally Posted by winner69 View Post
    Dairy farmer spokesman on radio said collectively dairy farmers use more electricity than Tiwai and its one of their biggest input costs blah blah .....do they get government assistance?
    Drought relief when required. Payments to the income equalisation scheme allowing spreading of income. R&D tax credits.
    Herd scheme stock valuation methodology that allows farmers to use stock values from 30 years ago, (who else can do that ?).
    Only 5% of emissions will be included in the emissions trading scheme. I am sure I have forgotten many other forms of assistance.
    Level playing field or does Govt pander to some forms of business because its politically expedient to do so ?
    No butts, hold no mutts, (unless they're the furry variety).

  17. #57
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    Believe me Tiwai use transmission assets at Dunedin, North Makerawa , and lines from Twizel to Invercargill at least. The story they are putting out is false . They deliver no benefit to NZ and should have been gone years ago. The price they get energy for is cost and they cannot exist on Manapouri generation alone.

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    Perhaps southland can be the first to start using electric cars when Tiwai closes down. This could be a good thing for NZ.

  19. #59
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    Quote Originally Posted by Beagle View Post
    Drought relief when required. Payments to the income equalisation scheme allowing spreading of income. R&D tax credits.
    Herd scheme stock valuation methodology that allows farmers to use stock values from 30 years ago, (who else can do that ?).
    Only 5% of emissions will be included in the emissions trading scheme. I am sure I have forgotten many other forms of assistance.
    Level playing field or does Govt pander to some forms of business because its politically expedient to do so ?
    I just assumed Winner was joking when he asked that question

    A little bounce for Genesis today so I took the opportunity to reduce my holding just a tad. I've sort of got it to that level that if Rio stays, that's great. If it doesn't, well at least I reduced a little and no hard feelings (I also own Rio Tinto directly). This approach means that I don't have to get all hot and bothered waiting until March next year.

    I see my Devon Alpha fund has a swag of CEN - will be interesting to see what approach Devon takes on this.

    I'm guessing the Government will do whatever it takes to Keep the smelter going. Losing 1000 jobs in Southland in an election year and the immense hit to Kiwisaver accounts (a lot of basic kiwisaver accounts have far too much in NZ shares and therefore far too much exposure to the gentailers) will give the Government plenty of incentive to sort this.
    Last edited by Bobdn; 25-10-2019 at 04:31 PM.

  20. #60
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    Quote Originally Posted by Bobdn View Post

    I'm guessing the Government will do whatever it takes to Keep the smelter going. Losing 1000 jobs in Southland in an election year and the immense hit to Kiwisaver accounts (a lot of basic kiwisaver accounts have far too much in NZ shares and therefore far too much exposure to the gentailers) will give the Government plenty of incentive to sort this.
    You will need to check with Winston. But personally I am not counting on the government doing very much at all.

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