why are you certain the quarterly will be + ?, page-32

Thanks Goofy, so to summarize LYC stated COp of about $5-6 back in 2008
2010 - $5.65 +/- 10% = $6.3 max (50% chemical, Energy 30%)
2011 - $10 (when phase 1 and 2 are fully running) - looks as if they have now added in WA costs (surely these were always a COP?) - about a 50% increase in less than 1 year! Apparent this was due to exchange rates and reagent cost increases. (44% chemical and 18% energy - both reductions from previous estimate so we must assume WA were either not included in the 20102 numbers of the WA costs have blown out.

2012 - $14-15 based on 22kt (70% variable, 30% fixed)

2013 - Eric suggested high teens for phase 1.

Analysis - IMO the costs used up to 2010 did not include WA costs, thus this number was a probably never achievable. These would always have been a COP and to then start adding them in in 2011 is a tad interesting.

Based on the 2012 data it suggests that there is a fixed cost of about $4 kg based on 22kt - that comes to about $88m, with variable costs of about $242m.

This would suggest that for phase 1 only of 11kt the fixed costs would be $88m + $121m = $209m, or $19 kg. This sort of works with the Eric statement, so happy to use these numbers.

The big cost increase between 2011 and 1 year later in 2012 was $5 per kg. From $10 to %15. Unless there was a huge spike in power costs in Malaysia (anyone have hard numbers?) then this sort of looks like the chemical costs doubled in 1 year. I'm surprised that more was not made of this huge cost increase in chemicals in such a short space of time.

All IMO and just trying to get my head around how these costs have blown out in 2 years.