Hi R,remember assumptions are the mother of all f.....Anyway...

Hi R,

remember assumptions are the mother of all f.....

Anyway back in November 2006 the $AUD/$USD was around $0.78/$0.79 and the price of manganese per DMTU was $USD 2.70
giving a net $AUD of $3.43.

Considering OMH's marginal cost of production is $3.50 AUD yes marginal back then. However even with BHP cutting the price from $16ish to around $5.50 USD, with the current exchange rate around $0.63 then the net $AUD price per DMTU is $8.70 - $9. If you check that site where you got the BHP info from you can see that OMH is offering for sale 2nd quarter of this year Manganese at around $5.50 USD DMTU. They wouldn't be doing that if they weren't making serious margin. Also considering the fall in freight rates, they will be making even better money at current levels - I would estimate their net margin around $5 AUD per DMTU (probably why the Ukranian boys are sniffing around)

So you would need a fall in Manganese to around $2.20 USD per DMTU before OMH becomes marginal again - admittedly anything could happen considering the world today but considering a lot of new production that came on in recent years has production costs of around $5 - $6 USD per DMTU which is dropping by the wayside then I think we might see some sort of bottom around the $5 USD mark which would be not bad for OMH

Cheers

J