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  1. #1211
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    The next question we should ask, which I do not know the answer to, is the weather systems for Manapouri and Twizel. I THINK that they are two separate systems. So Twizel could be lacking water, but Manapouri still has oodles of rain. Hence the value of Meridian getting its hands on spare capacity from Tiwai. It looks to me as if only supplying 400MW to Tiwai is very good business for Meridian. Which makes me scratch my head as to why the share price is not looking very happy. Any ideas?

  2. #1212
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    Quote Originally Posted by rayonline View Post
    Just a question. My ASB Watchlist still list MELCA and MEL. I thought people moved to MEL? Please educate me.
    Maybe just delete MELCA if MEL is showing accurately in your portfolio , if not maybe manually adjust

  3. #1213
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    Because its not a done deal yet ,mouse.

  4. #1214
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    Quote Originally Posted by mouse View Post
    The next question we should ask, which I do not know the answer to, is the weather systems for Manapouri and Twizel. I THINK that they are two separate systems. So Twizel could be lacking water, but Manapouri still has oodles of rain. Hence the value of Meridian getting its hands on spare capacity from Tiwai. It looks to me as if only supplying 400MW to Tiwai is very good business for Meridian. Which makes me scratch my head as to why the share price is not looking very happy. Any ideas?
    Uncertantly around the outcome of the deal. If you're a prepared to make a bet then at some point over the next month, make a move on the shares!

  5. #1215
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    Zaphod, "The degree to which it would create an economic stimulus is extremely debatable."
    I think we will have to agree to disagree on that one. haha.
    Hopefully you find my posts helpful, but in no way should they be construed as advice. Make your own decision.

  6. #1216
    Guru Xerof's Avatar
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    Quote Originally Posted by Zaphod View Post
    Uncertantly around the outcome of the deal. If you're a prepared to make a bet then at some point over the next month, make a move on the shares!
    Yes, some uncertainty around the smelter, but I also think offshore has been selling as the currency is starting to kill their returns. IIRC, foreign investors buy shares on an unhedged basis (bonds are hedged though)

  7. #1217
    Advanced Member robbo24's Avatar
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    Quote Originally Posted by Xerof View Post
    Yes, some uncertainty around the smelter, but I also think offshore has been selling as the currency is starting to kill their returns. IIRC, foreign investors buy shares on an unhedged basis (bonds are hedged though)
    All this talk of lowering NZ OCR to 2.5% won't do wonders for the NZD but internally it should bring some interest in yield stocks
    'I often quote myself. It adds spice to my conversation.' - G B Shaw

  8. #1218
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    Quote Originally Posted by robbo24 View Post
    All this talk of lowering NZ OCR to 2.5% won't do wonders for the NZD but internally it should bring some interest in yield stocks
    I agree, it will be NZ investors looking for yield driving prices up vs foreign investors taking their money away. I don't mind the NZD dropping a bit but it will cause problems at the other end if the iphone 7 costs me $2000.

  9. #1219
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    Tiwai Pt smelter is for sale, it will not close. And here is why I believe this

    Manapouri has recently been upgraded with new transformers. One was needed, but three were purchased. No sensible business would spend a cent on an asset of dubious future earning potential.

    Once a pot line is closed, I understand it cannot be restarted. Scaling down but not closing entirely reduces economies of scale, so is undesirable

    The remediation (closure) cost for Rio is huge. The more product it is deferred against, the lower the unit cost impact. Plus continued production defers the cost

    Energy prices have already fallen substantially as they are NZD based. This is the largest cost component of aluminium

    Worldwide aluminium demand will continue to rise as more auto components are made of this lightweight metal to increase milage

    Commodity cycles always turn, it's just a matter of time

    NZ smelted aluminium is super-high grade, not entry-level metal. Specialist products are less effected by commodity price movements (despite what Rio is probably saying)

    Aluminium battery technology appears promising and requires a high grade aluminium

    I fully expect the broad aspects of the deal were inked around the time Manapouri transformers were planned for purchase as replacement and contingency spares

    Rio played chicken last time. This is simply their negotiating tactic. I don't read anything into the delayed anouncement. Most likely ironing out the finer details

    But it would not be out of the question to see some sort of a JV emerging from this, not necessarily involving Rio in the medium-long term

  10. #1220
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    You may well be right & I think if Rio could sell they would, however that's I think the issue, could.
    Who would buy it?
    With such a large liability hanging over it, RIO would possibly have to pay someone to take it off their hands.
    I agree re demand increasing, but supply has been increasing even quicker.
    There is certainly no shortage of bauxite & plenty of developing nations that want to build more power capacity & one way of justifying this is to build alumina smelters just like NZ did in the 70s.
    In saying all that I would agree with you in regards cycles & its likely that ali prices will be quite a bit higher at some point.
    Hopefully you find my posts helpful, but in no way should they be construed as advice. Make your own decision.

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