project operations update, page-7

They are getting more honest about the issues which is good. The concern as always is there still seems to be some dodgy statements in the report.

My main concern is the working capital issue. They say at the stated production rate and current index pricing, they should be creating about 1 billion in revenue. Given a operating cost of $75 a ton this means operating costs of about $600mil a year and all up costs of roughly $850mil. Either that repairs will cost more than $150mil which is a huge budget and indicates to me that there are other serious problems not yet mentioned that also need fixing or the production costs are out of control.

3 months sounds like a very long time. Seriously, this is costing the jv approx 60 million a month in revenue and hence profit before tax. Sounds like they don't know how to do shutdown works, spare no expense because all the profit is in early completion of the shutdown. Surely they could speed up install by Ensuring the parts are flown overnighters, ensure the factories are paid extra to double shift for parts manufacturing, ensure the contractor has 50% more staff and machinery than needed with full double shift setup before things arrive, ensuring someone from KML is watching over the engineering team to make it happen and make sure they don't sit on the contract for a week.

I've seen 100m bridges replaced in under 24 hrs, People have built sky scrapers in a month and they need 3 months to add some plumbing? Perhaps they need 2 months to get the finance, 2 weeks to sign a contract and a final 2 weeks to build the job