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37,911 Posts.
828
08/05/11
10:18
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Trying to follow Oscar's reasoning
It takes 3.5t of bauxite to produce 1 tonne of alumina
Digging up the bauxite is the easy/cheap part
130 million tonnes bauxite produces 37m tonnes of alumina
ORD's share, if 25%, = 9MT
AWC owns 40 per cent of Alcoa World Alumina and
Chemicals (AWAC).
AWC reported first quarter 2011 spot and index alumina prices have averaged US$392 per tonne for the first quarter
Alumina currently crashed to about $370/t (14.5% of aluminium price)
AWAC production of alumina for the first quarter was 3.8 million tonnes.
So the AWAC sales revenue = 3.8mt x $392 = $1.5b
Alumina Limited received US$80 million of fully franked dividends from the AWAC joint venture during
the quarter.
So the NPAT for AWAC = $200m
The PBT = $286m
The expenses = $1.2b
Alcoa for all their business lines reported a 79% COGS expense for 31/3/11
Say $200m of AWAC expense = depreciation, interest, admin, etc
Say the AWAC COGS (cost of goods sold) = $1b or 66% of revenue
Last AWC presentation states bauxite is 28% of alumina cost.
Cost of 3.8mt of alumina = $1b or $263/t
Bauxite expense = $74/t
3.5t baux = 1t alumina
bauxite valued on sales value basis at $21/t
in-situ value is generally 10% of sales value
say 25% ORD share of 130mt of bauxite = 0.25 x 130m x $21 x 10% / 500m shares = 14 cents per share
14 cents per share is a little different than $9 per share
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