Ann: Media Release Net Profit $106.4 Million for the Half Year, page-53

chad101, unless you work on site at Bootu Ck mine then one must wonder where you get such information from. I do not dismiss it, but would like to know the source.
Its common knowledge that the Bootu Ck mine only has a limited life and according to OMH Resource and Reserve update some months ago showed a Resource of 9.95 million tonnes and an ore reserve of 7.32 million tonnes, obviously somewhat less than that now. OMM Bootu Ck was always going to run out of Mn ore at some point in time, the report states that at 800,000pa it will run out by mid 2021.
https://www.asx.com.au/asxpdf/20180416/pdf/43t6y4t08ft71m.pdf
The report also mentions that drilling will start this year at Renner Springs.
The Tailings Retreatment Plant is set to start producing during the March Quarter 2019 according to the latest info given on the 30th July 2018 in the Quarterly report, so we can only assume that this information is correct. It could possibly be delayed longer, this wouldn't matter in the scheme of things as it will then just produce longer.
The Mn ore production rate in the June Quarter was in line with expectations but the shipments through Darwin were down for the Quarter, however theres now 52,378 tonnes of 36% Mn ore in stock.
To my mind there is no indication that production or sales will be severely disrupted for the next few years, the TRP will only add to the volume of Mn ore produced.
The Mn alloy production requirements for OM Sarawak is around 480,000 tonnes annually. The TRP and even remnants from Bootu Ck will keep it supplied for up to 10 years is on the cards.
OMH's share of Tshipi ore is also enough to feed the smelter. OMH may also increase its stake in Tshipi now that they plan to list Main Street. OMH is in a position to buy on the market if they so wish.
Its worth noting that only 6 furnaces are producing Mn alloys, whereas 10 furnaces are producing FeSi. As you can see from the 1/2 year Financial Report, the price of FeSi is some 20% higher than Mn alloys. The profit margin is far greater on the FeSi as the power requirement is far greater (ie more than double) and this is where OM Sarawak's advantage plays out with cheap power.
chad101, OM Sarawak plans to introduce silicon metal rather than more Mn alloys, and as King87 states, nobody will be surprised
"By 2nd quarter 2019 there is likely going to be plans for expansion of the smelters. Incremental investment will be less than the original cost as land and electricity infra was already purchased during the 1st phase. There will be synergies as well."
OM Sarawak has been planning to introduce silicon metal, but decided to fire the last furnace with FeSi as this was the quickest easiest to do and take advantage of high prices. Long term however its Silicon Metal that OM Sarawak will be looking at.
Why?
Once OMH develops the Quartzite/silica mine in Malaysia it will be the most competitive supplier of silicon metal in the world.
(1) supply of cheap inputs, it requires 2.7 tonnes of quartzite to produce 1 tonne of Si metal
(2) cheapest power and Si metal requires 13,000KWh/t.
China is currently the worlds largest supplier (60%) and produces 4.6 million tonnes. The price of power in China is more than double the price of Sarawak SCORE producers.
Current price of Si metal " from the end of last week, and the export FOB price is US$2,655 - US$2,675, up by US$35 ditto. "
The cost of power for one tonne of Si metal is ( OM Sarawak US$400/t)
China power costs range from 0.58yuan/KWh to 0.90yuan/KWh or US$0.085 -US$0.12/KWh
At the lowest cost = US$1105/tonne.
You can see OM Sarawak's huge advantage when producing high energy consuming products.
You know you missed out in early 2017, best not make the same mistake now.