Hi enig..
Whilst not wishing to sound like "Son of NB1" (no offence nb1!!), I think there is plenty of blue sky. I just can't put a number to it and don't want to get into the unfounded bidding wars of 2007.
If we assume for a minute that Newcastle is scaled to suit OneSteel operations in Sydney and Newcastle(it would be nice to have that confirmed one day). OneSteel as a company is a tiny fish in a big pond. They produce less than 3Mtpa raw steel. Most of that is out of Whyalla, with only 0.3Mtpa from the ex-Smorgon Newcastle EAF and 0.55Mtpa from the Sydney EAF (although pickle liquor and scale production is not tied exactly to steel production).
OneSteel doesn't even make it into the Top 80 World Steel Association list, which cuts off at around 3.1Mtpa.
By comparison, a company like ArcelorMittal has 60x the steel output of OneSteel, at 104Mtpa (2008). Their revenue is about 50% of NZ's GDP! Nippon Steel has over 20x the output.
That isn't a putdown of OST. Its just to put the scale of Newcastle into perspective. I doubt that future plants will be sized that small. Given the relative size of other industry players, I think $7M stepsizes in earnings are very conservative and unlikely. It wouldn't even keep up with the output from one blast furnace.
So how does that translate to SP? If they reach an agreement to supply the technology to a steel producer in the Top 80, $0.50 is not unreasonable, depending on production of that company.
If ArcelorMittal wants the technology.....???!!! That WILL be an interesting market open!
For the 200 Top 80, see
http://www.worldsteel.org/index.php?action=storypages&id=330
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