Re the need to release performance data at that time, I suppose I am questioning the strategic benefits of doing so. If anything, it would happen after a conclusion of the Teresa issue and not before IMO. There is also a presumption that they have run the demo plant for a sufficiently sustained period to get meaningful production data. The nature of a “demo” facility is that you start/stop it continuously. Parts are changed/modified and retested. I recall a recent LNC statement that 90 odd parts had been replaced or modified on the plant. Improvements/refinements are gradually introduced and it is only after you believe that you have exhausted all avenues of improvement, do you seek a sustained production run aimed at addressing reliability concerns etc.
Another strategic issue for LNC is the pressure it is placing on the Qld Government by announcing its intention to move its potential investment dollars to SA. The LNC project would have had “significant project status” within the Qld Government. They keep a register of pending projects according to likelihood. It is thus of no surprise that they recently replaced their energy minister. Pressure must be maintained if a 2011 cabinet decision is to be obtained, rather than a 2012 one. Management, who will be in regular contact with the Government, are best placed to assess the timing of information releases given the status of thinking within Government. Shareholders short term need to know must be balanced against these broader longer term strategic issues.
LNC Price at posting:
$2.15 Sentiment: Buy Disclosure: Held
