Originally Posted by
iceman
Have been studying various info on Aluminum smelters around the World. My reading of it is:
# Currently there are plans for around 35 new aluminum smelters worldwide
# 25 in Asia, 3 in Middle East, 4 in Europe /East Europe, 2 in Canada & 1 in Argentina
# Total production for all those at full production would be around 16 million tonnes p.a.
# Estimated electricity price in China & India is around USD 40/Mwh
# construction cost of India/China is around 1/3 of the Western World
# the average cost of electricity at the other planned smelters is around USD 20-25/Mwh
# First NZ Capital estimates new electricity contract with Tiwai at USD 39.4/Mwh
My conclusion is that, unless we get around 20% increase in aluminum prices and around 10% drop in FX for NZ$ against USD (both possible), Tiwai has no future. Shadbolt, prepare Southlanders for that happening, sooner rather than later.
BUT, from my reading of it, it will have only minimal impact on Meridian, CEN & MRP. The Labour/Green threat is the real issue here.
I really want to invest in Meridian. Think they have great assets, sustainable future dividends from very positive cashflow, but fear political changes.
For me the question is, do I put my money faithfully into Meridian or do I start liqidating NZ assets and move them off-shore fearing a Cunliffe takeover ?