Think about it.
We went to $1+ because the economics of the project were great!
Then the Covid supply line issues hit (hard!) essentially doubling CAPEX cost. And doubled the projects timeline. Is this now the norm for the next decade? Off course NOT!
The war in Ukraine blew out energy prices which in combination with very lose monetary policy and constrained supply line issues rapidly ramped up inflation and subsequently interest rates which in turn meant the double CAPEX cost would require much larger interest payments that due to longer timeline would also have to be paid for twice as long! Are very high interest rates the new norm? I am not 100% sure, but inflation has been dropping rapidly so I think probably not.
So to sum up if CAPEX drops for 200% back to say 120% and the build time goes back to the projected 2 years instead of 4 years we may well be back to a very attractive project. Add in possible lower interest rates and quite possibly higher IO prices (not many projects going ahead right now!) and we are essentially back to the situation that pushed us to over $1...
Action required by HIO? NON!
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