Mbro,"The cost of establishing access to hot water for the...

Mbro,

"The cost of establishing access to hot water for the Coldry process from LYP is estimated to be a one-off A$5M . Failure to secure this access will require the JV partners to generate their own heat and electricity."

That report was pre-LYP coal/site ann. LYP have since agreed on coal/site/one-off A$5M for hot water.

Still very relevent info. Shows Tincoms commitment, which is reciprocated by LYP.

A$5M is a drop in the bucket for Tincom.

Assuming a conservative figure BCE price till 2014 - ($80/tonne), the initial 2mtpa - would deliver approx $160 mill in revenues. Take out the $40/tonne Coldry cost...and Tincom are left with $80 mill profit (100%) - (the pay back figures are in the AGM report) - not bad for their initial trial investment.

But Tincom want to ramp it up to 20mtpa by 2020. Thats about (based on post 2020 figures, the coal price will likely be $200/tonne ongoing):

$4 Bill revenue pa minus the approx $60 Coldry cost per tonne ( $1.2 Bill) - (the long term stable brown coal feedstock cost is about $10/tonne - which is the LT foundation of the project - allowing for CPI) - leaves about $2.8 Bill profit pa.

Tincom are effectively getting a 50yr LT contract to get enviro friendly BCE at wayyy less than the likely black coal price 2020+ (likely Tincom are getting BCE less than half price LT). Tincom have the capex risks - but the potential profits/savings are enormous.

Asia is thinking long term - especially when it comes to LT energy security.

LY (Tincom) coal is 60% moisture. It will still be a very profitable project - but elsewhere overseas the moisture % drops dramatically - but the profit margins increase proportionally. ESI will attain much higher profit margins in all offshore deals.

Tincom are looking to go 100mtpa - so the initial 2mtpa, although significant to ESI - is a baby step - and Tincom is just the first Coldry project.


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"Melting glaciers in the Himalayas, a steadily sinking Shanghai, expanding deserts"

http://www.nrc.nl/international/article2434478.ece/China_finds_there_is_money_in_the_green_economy