GPASAS, The production cost of USD 230/T is interesting. However I am not sure what it includes, it may just be the C1 cash costs. I doubt it includes ammortisation, interest, depreciation or remedial capital. If it were the full cost of production the PSH would be making $50/T on 360,000 T = $18m/annum and paying dividends.
No matter how the carbon tax and compensation is rigged PSH will be worse off to some extent. It can't afford to take any more pain from the exchange rate or a carbon tax.
Remember the objective of the carbon tax is said to be Polluter Pays. Well PSG is a big polluter. The carbon tax is meant to reduce our CO2 emmissions, this obviously requires carbon intensive industries like PSH to close and have product imported instead.
The Carbon Tax requires sacrifice for Australia to show world leadership. The guys at Penrice will probably understand that their jobs must be sacrificed. I hope they are phoning their unions to emphasise how proud they are to be leading this sacrifice.
Sharholders will also be proud to be sharing the cost of world leadership.
bacci
PSH Price at posting:
24.0¢ Sentiment: Sell Disclosure: Not Held
