Ann: MEDIA RELEASE H1 2022 NPAT USD60 Million UP 231%, page-67

The smelter is an incredible asset.

really the management made 4 key mistakes in the last 3 years.

1) reducing production capacity from 100% to 75%. Thereby letting go of workers. Hence they missed a major run up in ferroalloy prices. A huge mistake. In the 2 years of 2021 and 2022. They missed over 200k tonnes of production at very good prices. If u averaged gross margins out at 600, thats 120million aud there.

2) allowing the manganese ore mine to operate despite rising costs. Losing over 40mil aud in 2021 alone.

3) locking in low ferroalloy prices at june of 2021, thereby missing a huge run up in prices. How much money was left on the table? I dont know, i suspect it was substantial.

4) not resolving the tax rebatement issue so there would be seamless transition from the first 5 years of tax breaks to the 2nd 5 years of tax breaks.


if i had to guess, i think the cash lost in 2021 and 2022 is around 150 - 200mil aud.


granted its hard to predict these things and management made the decision while things werent so clear.

but its really a huge sequence of mistakes...

even then, trailing 12 months pe of 3.4 is just an absurdly low pe ratio for a low cost smelter like this.