overview of ord - huge potential, page-48

folks getting a little carried away here, imo

600,000 tpa of alumina at 5% royalty, $370/t revenue, $200/t opex, 6% interest expense, 20 years depreciation and 30% tax = $25m NPAT pa share between all partners

payback on $600m in CAPEX = 24 years

drop the opex down to $150/t increases the NPAT to $46m pa and reduces payback to 13 years

the impression is expansion to 1,200,000 tonnes will cost $$$$$

however, ignoring the expansion cost, 1.2mtpa of alumina at 5% royalty, $370/t revenue, $150/t opex, 6% interest expense, 20 years depreciation and 30% tax = $146m NPAT or 4 year back

looking better

add another $250m for the expansion and it becomes a 6 year payback on capital

long term project, poor returns it seems

alumina price is still too low

in 2008, the alumina price peaked at around $460/t

DYOR