I don't think it's declining based on the margin compression but rather the scenario where they receive no gas at all which would halt mining activities at MATSA.
SFR would be liable for the FV of their hedges on expiry and with no offsetting commodity sales, the MTM value could be significant.
No one knows how far it could go - what if all EU / Russian copper is closed down? How much supply is removed from market and what would that do to the Cu price? Just look what's happening to Nickel, for instance. It would obviously be great for Cu price but potentially disastrous for SFR being fully exposed to a Cu squeeze with contracts to settle and no production. Similar thing happened to airlines over Covid.
The good news is we have geographical diversification with De Grussa production, so will be hedged for this year at least...but in the event we had to shut in MATSA, the drain would be significant.
Ann: Change of Director's Interest Notice, page-43
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