Secret formula proves finger lickin' good by: CRITERION: Tim...

Secret formula proves finger lickin' good

by: CRITERION: Tim Boreham
From:The Australian
December 14, 201112:00AM

Source: The Australian


MHM Metals (MHM) 98.5cSLAG and dross sound like undesirables you don't take home for the family Christmas turkey, but for MHM these aluminium waste byproducts are a desirable commodity when treated with its top-secret process.

Salt slag and black dross -- the stuff skimmed off the top of the furnace when aluminium is reprocessed -- traditionally has been sent straight to landfill. But with the exception of vegie-friendly potash, the components are toxic.

To the scepticism of many in the aluminium industry, MHM perfected a KFC-style secret herbs-and-spices formula to extract valuable elements from the waste. Aptly, MHM yesterday signed a land deal in Colonel Sanders' spiritual home of Kentucky. The facility, based on throughput of 200,000-250,000 tonnes a year, is backed by the state of Kentucky with a $US1 million grant ($986,850).

Apart from also being known for tobacco and marquee horse races, Kentucky is top-heavy with aluminium processors and thus the ideal venue for MHM to globalise its dream.

MHM says the facility will process up to a quarter of the slag and dross waste produced in the US. MHM's plant near Geelong, which handles the output of Alcoa's Point Henry refinery, can process up to 60,000tpa.

The facility last year generated $8.5m of EBITDA. MHM director Ben Mead is mum on the Kentucky plant's economics, but one clue is it will enjoy lower labour costs.

Mead admits the Hobart-based mob's US expansion has been challenging, but that's because other technology developers "tried and failed", rather than because of opposition to antipodean upstarts.

Criterion had MHM as a spec buy at $1.28 in May and maintain the call after the stock lost 10.5c yesterday for no apparent reason.

http://www.theaustralian.com.au/business/opinion/secret-formula-proves-finger-lickin-good/story-e6frg9lo-1226221303015