Not to be rude but I honestly don’t care how good a payer Hindalco is, how long the voyage takes or when/how the payment is made.
Inventory is part and parcel of running a mining company, to suggest you can liquidate that tomorrow as cash without repercussions is wishful thinking - you need stock to ensure supply chains work - so any liquidation needs to be restocked which will cost cash to build - so it’s not going to save you if you are cash poor is my point, it’s like a credit card, you need to restock the shelves which costs money.
They hold around $60m in inventory and going off the reports one can assume this is $15m tin and $25m copper (either in concentrate or ore on stockpile) and a further $20m in stores and spares. The tin and copper is held at net realisable value not cost as it was written down recently.
$15m of tin at say realisable value of A$18,000/t is 800t of tin or around 70 days inventory (assuming 4ktpa MLX share) - not awfully large.
$25m of copper at say realisable value of A$7,000/t is around 3,500t of copper or around 50 days of inventory (assuming 25ktpa) - again not awfully large.
I think it’s wishful thinking to believe a slipped shipment or complicated arrangements with Hindalco is the cause of their lack of cash.
MLX Price at posting:
23.5¢ Sentiment: None Disclosure: Not Held
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