Yes ConcerndCitizen, there are many unanswered questions. I'd expect wages would be low in Indonesia, but still comparable to Malaysia. Transport is also a cost which may not be factored in correctly.
A reliable source of manganese is also important and I believe that GMC will be paying far more than the US$80/ tonne as stated in presentations.
Investors must realise that the Samalaju SCORE industrial estate in Sarawak is becoming one of the worlds largest ferro alloy production centres, several large companies have set up there due to the cheap power.
A new Port at Samalaju has been built, and all the ferro alloy plants are fed directly from the ship to factory via conveyor belt. http://www.samalajuport.com.my/ You cannot get transport of raw materials and export product cheaper than this. This a state of the art facility and with conveyor belts ships are unloaded with ease, no trucks reqd. The product goes straight from the ship to the foundry.
I don't know how GMC can build a competitive ferro alloy factory so cheaply. OMH spent $600 million and can produce 420,000 tonnes annually.
Another company setting up at Samalaju SCORE is Pertama Ferroalloys Sdn Bhd a joint venture with Japanese steel mills http://pertama-fa.com/
“We know we have the power supply from Bakun and Murum dams for 20 years and that is the big advantage in this competitive world,” he told reporters when asked why the company has decided to invest in Sarawak Corridor of Renewable Energy (SCORE).
The world, he said, was currently facing rising cost of power supply and it would be an advantage for heavy industry players, in particular, to utilise sustainable energy sources.
Pertama Ferroalloys sited at a 180ha land with total investment of US$360 million is among six foreign companies that have set up their plants at SIP
Another ferro alloy company is Sakura Ferro alloys another huge player in the ferro alloy market, http://sakuraferroalloys.com.my/
I do not believe that GMC will be competitive, as they're already not competitive with power/electricity or transport and the raw materials is dubious.
