Hi Utrade,
I will try to answer your questions, and give you the information you have requested.
I can understand that those numbers could be rather terrifying from an MNS perspective. I agree with your interpretation that they imply a cost contribution of about US$1600 (per tonne of product) from the notional input price of the graphite, for the SYR coated spheroidal graphite. The balance of the cost, namely, US$1600 per tonne, must be assumed to be the cost of spheroidisation and coating.
The announcement makes it quite clear that the cost estimated does include the cost of coating.
You asked about the cost of waste disposal. Very interesting. Because, in the SYR case, there is actually a recarburiser by-product credit accruing, of US$465 per tonne of spheroidal graphite, for the material milled during the spheroidisation process. (It's high-quality carbon, after all!) So the net cost, after credit for the recarburiser, is actually US$2735 per tonne.
That might be something of a challenge to match, if the source material is to be sold at US$2000 per tonne, in line with the MNS Basket Price. Spheroidisation, I understand, of MNS graphite has a claimed yield of 70%, right? So, after the micronisation step (whatever that costs), and allowing for spheroidisation losses, the input cost is $2750 per tonne, followed by spheroidisation costs, and then by coating costs. If the last two steps cost the same as estimated in the SYR Economic Assessment, namely, US$1600 per tonne, we end up with a cost of US$4350 per tonne, plus micronisation costs. (vs US$2735)
Now I am among the first to admit that these estimates are not likely to be accurate to the third significant figure! But the disparity is so large that, as I said at the outset in this response to your questions, it could even be a little terrifying.
It really does not matter who actually incurs these costs - MNS, or the customer who takes graphite concentrate - they remain as dollar costs, and the ultimate user is the one who pays.
And that user has a choice.
Will he pay a large premium to buy product sourced from MNS?
Cheers,
Prime1
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