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I knew the percentage was an awful lot smaller than Europe but I was under the impression that, prior to the diesel scandal, they had been making steady inroads into the American market. 3% doesn't seem to explain the size of the fine the administration levied on VW which was fairly hefty if memory serves me correctly. VW paid $25 around billion for ‘Dieselgate’ I think. Just as well they didn't have a much larger slice of the American market.
TDT - diesel car sales are a much tinier percentage in the US - 2014 3% of all cars and trucks sold were diesel versus closer to 50% in Europe.
video 2 is incredible..
You have to be careful on battery costs becuase there are two figures out there for two different things. One is the cost of the battery itself, the other is the battery pack. The difference! The battery is, as the term suggests, the individual battery cell, the other is the assembly that's in the car so a figure for the battery cell itself is going to be and awful lot less than the battery pack which includes the casing, cooling system and battery management system. When somebody says they've already hit $100/kWh its more than likely referring to the cost of the individual battery cell. The figures quoted by BNEF and Tony Seba are for the battery pack and its the cost of the battery pack hitting $100/kWh that's relevant.
Diesel sales in the UK in November 2019 are down 27.2% on November 2018, BEV sales up 228.8% and that's before the UK’s coming incentive change for EVs which doesn't kick in until April 2020.
The new European wide emissions standards will simply make diesel cars unviable. China has plans to phase out diesel. America will follow eventually. Its all just a matter of time.
If you have any doubts about where this is going try comparing what Tony Seba was saying in 2014 to what he is saying now and whether his predictions have been on the money. That's a fairly good indicator of how long this is all likely to take before lift off.
Maybe that is a partial reason why the likes of Honda are ditching Diesel car manufacturing next year as the number of sales are getting to a point where it's just not viable.
Another potential factor is that as the number of ICE cars being manufactured reduces maybe those costs rise.
That's seems to be a potential factor that isn't taken into account.
Thanks TDT much appreciated, your a right I have seen the break even / key price point before I think it was in an Elon musk presentation. There was a news story I read a few months ago stating that they had already hit the price point. Which is interesting but not sure how true it was as my understanding is Panasonic is part of the manufacturing process, but they were not mentioned. My thoughts on Russia as I have worked / purchased a business there previously is wheels need to be oiled !! A friend of friend etc. The interesting point about the new investor(s) is they requested to be anonymous (my assumption) therefore I hope they will have a vested interest in helping the project along. The EV market is gaining pace and I believe european Governments will promote / provide subsidies including the uk as they have to be seen to be promoting the environment, more volume through the same manufacturing plants will bring costs down for the batteries and the cars. Just need the USA and China to call a truce and I think that will happen before the election in the USA.. been here a long time 1my self and I do feel Robin's frustration and understand it is sometimes better to do nothing and wait. Also read an old RNS with Korea and Amur never heard anything again and it was not mentioned on the BB until a few weeks ago but no one picked it up... onwards and upwards, keep posting TDT and Redlee I enjoy the debate ??
IMO it's not really about Amur at the moment, as such, but more to do with developments in the battery space/electric vehicles. That's why I despair at RY getting the basics wrong. He should be selling Amur's story via the emerging EV space seamlessly by now. That's what makes nickel sexy. The right place, right time mantra b0ll0cks is tired, trite and, quite frankly insulting. In simply doesn't stack up.
What you need to keep an eye on is something like EV battery costs. That will tell you more about what is likely to happen with the price of nickel and therefore Amur’s prospects going forward than anything else.
Take this for example:-
BNEF produced a series of figures outlining the cost of battery packs on a $/kWh basis from 2010 to 2018. You can see the figures in the Actual column in the top set of figures starting at $1,160 in 2010 and falling to $176 in 2018. The fall in cost over the years varied from year to year but I worked out that, on average, the drop was exactly 21% year on year. Assuming the 21% fall year on year continues 2019 would be $139, 2020 $110 and so on. The columns to the right hand side are predictions based on the rate of decline slowing. Even if the decline from here on reduces to say 10% year on year the cost of battery packs still hits the $100/kWh mark by 2023. That’s the level where EV’s start to get cheaper to buy than equivalent ICE vehicles (remember they’re already cheaper to fuel and maintain). That’s when wholesale adoption of EVs is expect to really kick in.
BNEF released figures the other day for 2019 and it seems the decline in price has slow over the last 12 months. The average battery pack cost for the year has come in at $156/kWh. That’s a 11% decline over the previous year. If that rate of decline continues then 2023 is still the year when the $100/kWh figure where EV’s become cheaper than ICE vehicles is achieved.
This is the sort of thing you really need to be looking at. If it all goes our way in the nickel space Amur will, IMO, take care of itself.
Sorry TDT should have said the facts are there for all to see !! Fat fingers first thing in a morning ??
Wow thank you TDT, a well thought out response, much of which I agree with, the facts are, the trade war I believe is also holding back chinas growth, as you say we dont want the price of nickle to rocket or alternatives will be sought a stabilisation of 7 to 8 dollars per pound would be good. I still have my fingers crossed that the commitment to not take any more funds for three months and the flow results etc being due will result in some positive sentiment , we are still in an MOU perhaps all this may be linked, all that it would take is a RNS stating we are working with "xx" this would then show we are not on our own. I believe we would then see more companies come out of the woodwork. I n the presentation I believe Robin indicated that the road was seen as a separate project by Russia so maybe there are actions / discussions taking place and we could hear news on this ?? There are lots of pieces in the jigsaw but we need on firm commitment for this to move in a positive direction, I believe RY is juggling all the pieces and needed help that's why our new guy is brought in, I see that as a positive as RY realised he needed help so brought in a well known ( in Russia) name, remember Russia does business different to the west. I do believe we will be bought out well before production but a price a lot less than we all think. Still holding out for news
While there's no denying that RY is mr amur and he is the reason they are still going...it should be said that he has been well paid over the years and the market has provided amur with a whole lot of money.
There is nothing that I would like to see more than Robin at the forefront of amc securing a big deal either through takeout or jv....it would rap things up nicely for him but I just can't see it at present and going forward the business need rejuvinating.
The whole scenario needs freshened up, from bod to investment to strategy to logistics to end game.
I would hope that robin himself would think it's about time he handed over and took a back seat, maybe tb has been given the clout underneath and robin is still the figurehead but shareholders and the market need to see some signs of life or things might get too tough!
One thing I forgot to add, they can't wait for ever and they certainly can't assume that we will not see a repeat of what happened in 2007/8. If nickel takes off to the stars once more it merely creates the incentive to engineer nickel out of the cathode equation all together.
Its all about timing.
In short the future for nickel becomes an awful lot clearer in 2 to 3 years. I think RY and team know that.
As for clearing the decks I don’t think that came from an investor. The deal with Riverfort is nothing other than a potential drag on the share price in the event of value enhancing news. Whether the new lot that have come on board (Brian Savage’s contacts?) are any more solid remains to be seen but I think this is something Amur felt they needed to do.
As for RY’s position I’m not questioning that. He is the reason we’re still standing after all these years in what has been an extremely difficult period for the nickel space. He should, IMO, be applauded for that. I just think we need somebody who is better at selling the story. Being an accomplished geologist and engineer is a different set of skills to being a good salesman and that’s what we need right now.
I think you're right, I think they are stalling for time. The important thing here, however, is to understand why and whether, in doing so, it’s to our advantage. At $6/lb., no matter what the crystal ball is telling us is just around the corner, doesn't make Kun Manie a compelling must have asset. Given the time line into production, 4 to 5 years, and the expected shortfall in nickel 5 years from now you’d expect Kun Manie to be very much in demand but its nickel, it does have a rep. It’s not called “fickle nickel” for nothing.
The price of nickel rocketed 12/15 years ago only to come crashing down to earth a few years later. Billions were committed, at the time, to feeding what was an insatiable appetite for nickel only for billions to be lost when Jinchuan pulled the NPI rabbit out of the hat (at the same time as the GFC). You only have to look at how much BHP lost on the Ravensthorpe project to understand why there might be a fair degree of reticence currently on where this is all going.
The main market for nickel is stainless steel at around 1.4m tonnes or 70% of the market each year. That’s expected to grow at a CAGR of 3 – 4% over the next 5 years. If you work out what that means in terms of actual units of nickel then look at what’s going on in Sulawesi there’s a significant disconnect between the expected increase in demand and the amount of new nickel supply (NPI and ferronickel) in the pipeline.
The only reason I can think of for this is the intention to substitute the class 1 nickel from sulphide sources still going into making stainless steel for NPI and ferronickel. From memory that’s about 350,000 tonnes. That’s going to put a cap on any nickel price rise pressure from the EV sector in the immediate to near term IMO. The big unknown is the speed with which the EV market will develop, the price of batteries and the demand for nickel but I don’t see that really kicking in for at least 24 months.
The latest figure coming out of BNEF for the average price of a battery pack (the pack not the batteries themselves) is interesting. At $156/kWh for 2019 the improvement on last year’s figure is in the region of 11% to 12% (BNEF’s figure for 2018 was $176/kWh subsequently revised up to $180/kWh). That’s a slow down on the average 21% pa improvement in price since 2010. If the price drop were to remain around the 11% to 12% pa level going forward it would mean battery pack prices hitting the $100/kWh level around 2022/3. That’s when the price to buy an EV becomes less than a comparable ICE vehicle.
I must admit I believe AMC are stalling for time. If they complete the DFS that have no more activities to undertake they may become vulnerable if it was known little interest is being shown. My thoughts on the funding were they were told to clear the decks and the investor had instructed them to do so. I have my fingers crossed that some announcement is made in Jan/ Feb reference road support and flow results. This may lead to better a better financial deal or maybe a potential suitor. I say this as I do believe there was a reason why the loan was paid off and I hoping it was a positive reason !
With regards to the current BoD performance, (excluding Tom Bower as a recent, arrival), the definition of insanity would spring to mind……”keep doing the same thing expecting a different outcome” – how much longer? 2019 seems to me as a “lost year” of little/no progress – could the BoD explain what they have contributed during this time to take the project forward and consider their respective contributions. Has everyone earned a place on the team going forward, or should considerations be made as to who should be allowed to go? Just some thoughts in my mind given the dire history of 2019 in particular.
I had reached the same conclusion. I think RY has hit the buffers as far as AMC goes. I have not been to a meeting for a couple of years. His presentation very poor and very boring with nothing new to add. Won’t bother to go again. The only positive I can take from the current state of play is Paul has parted with a years salary in shares and we have a new man on board who may be able to move the project forward to a sale of some kind. RY seemed quite sure AMC in it’s present form would not have the capability to develop a mine.
RL. The pathetic hand out says Right Project,Right Location, Right Time. Your comments were very much correct. RY even started going on about moving the product back to St Petersburg in empty rail trucks?
As I sat getting bored I looked at the investor document. Page 9, showing the 325 road route. If you build a road around the Tokinsky Nature Reserve to the East and went North you would meet the now built railway ( above the word Yakutia on the plan) distance 140/150 kilometres.
I was there on Wednesday and I'm sorry to say but I would definitely advocate for RY's removal because it was like listening to someone talking about their train set and trying to convince everyone that his was best even although the train has never been on the track.
I suppose it could be said that RY might have good relationships there so maybe difficult to replace but hes past his sell by date now and you would not want to be going all the way with him at the helm is my view.
On the theme of relationships, I'm not really sure that the Russians would trust robin in that position also, so a change should come sooner rather than later...imo.
I will not attend the agm but it was clear that some of the holders there know robin quite well and he still might have a bit of support but I think those who do attend the agm should try leave the bod in no doubt that change is needed asap.
I've thought about your question over lunch, a ham sandwich, which was probably nowhere near as good as RY's lunch by the sound of it. Anyway I agree with you - poor, problem is our expectations have become conditioned with RY to be extremely low and he is able to consistently meet these expectations such that we don't notice the issue.
So, what is driving the timetable here? All the workstreams currently underway could have been in play at the start of the year, even before we got the PFS, RY should have known that all this news vacuum over the summer would have let the SP drift lower, after he promised a update of his strategic plan, and resulted in more dilution on the required fundraises.
All I can think is that he has been playing for time as you have highlighted on many occasions, but the TEO had become time critical. Furthermore delaying the DFS by a year after the TEO is further evidence of this, from what I can see RY does not give me confidence that he will get all his debt finance from Russian banks based on the TEO only.
This leads me into another point, when did RY make it clear that the DFS would not be completed at the same time as the TEO? Everything he has said was that the documents are in substance the same thing, just changes in format and as work is completed sections in the both documents will be filled in.
This is another example in a long list where being open and honest with investors is a very difficult concept for RY, and is the key reason (goes all the way back RY's handling of those SGS MET results) why I do not attach much weight to RY comments wrt my future investment, which will depend on hard data in proper reports. Most of the strategic level decisions RY makes I actually agree with, but he does a poor job of gaining support for his strategic vision or indeed any lower level tactical plans.
And if we needed yet another example, why does RY feel the need not to allow us retail investors sight of his detailed gnatt chart timelines that where in the presentation he gave at the 121? of course we know all about the colourful history of RY's previous gnatt charts. They show that we won't get reserves until end of Q3 and detailed economics following the 2018 drilling data uplift is not likely to come until the end point of the TEO, what happened to the living document?
This is beginning to sound like a rant, so I'll stop it there, but yes this is leading to a conclusion along the lines of your final comment about a salesman. I would not be unhappy if RY stepped aside into a more technical role, to work on all the engineering tasks aligned with his background and somebody else have a go at CEO, maybe TB? don't know enough about him but he is probably worth a go.
This is not something I am agitating for and I only hold a modest amount of shares at the moment to keep an active interest, so I am not sufficiently motivated to get to an AGM and raise my arm in a vote. ATB.RL
I’ve just listened to the presentation. I guess you could put it down the jet lag but I thought it was poor. What did you think?
If you are going to focus on the emerging EV market as the main reason why Amur is a good investment then get your facts right. A 1:1:1 battery cathode is nickel/cobalt/lithium! Really. The clue is in the initials, NCA or NMC. The lithium is the electrolyte it’s not in the cathode. As for the static battery market, nickel is unlikely to feature significantly there so why mention it?
The right place, right time, right commodity mantra needs to be put to bed, either that or revised. It’s most definitely not the right place. A 320km round trip by truck makes shifting the concentrate expensive. Right time, by his own admission, is a bit premature . Another couple of years from now and it will look an awful lot more tasty than it does now. At least the right commodity part seems about right. So far Jinchuan in Morwali hasn’t done anything to dispelled that part of the mantra.
He really needs to be more on the ball at these sorts of presentations either that or we need a salesman to step into the breech.
Those points about position on the C1 cost curve can be scrapped, I've been reading the graph wrong! I was using the little up arrow, rather than the dotted line, so the project still sits at the 50th percentile. In fact RY clearly states in his presentation after listening to it again the project sits at the middle. Other comments about the factors affecting capex/opex still apply. Apologies for the confusion. RL
I'll answer my own question around the cost issue and flag the response I would expect RY to make.
RY's PFS tells us that the operating cost estimates go back to H1 2017 and the work undertaken by RPM. We are advised that there has been some cost inflation, but the continued use of these numbers is justified by the higher benefit derived from the RUB devaluation vs the USD (8.3% in the same period). RY's PFS quotes an FX of 65 and when I looked yesterday it was about 63.7, so RY could employ the same argument and just about get away with it. So in summary at the present time maybe that C1 cost curve is a reasonable view of where the project currently sits.
I would also point out that RY's PFS flags up FX exposure re some of the capital cost as well, with 51% of the initial and sustaining capex in RUB. In addition there is about 25% of the capex bill for plant & power quoted in USD, where any benefit already flagged by RY re devaluation does not apply and the absolute numbers may in fact outweigh the benefit elsewhere, who knows? There is no date applied to these capex quotes so it is difficult to assess, however the PFS itself suggests there may be an issue by advising any further update to the study needs to have these costs updated. Obviously FX benefit could unwind so it is an area we need to be aware of. RL
I've just noticed in RY's presentation how the TS option has moved down the cost curve and now occupies a comfortable mid 2ndQ position compared to bang on the 50th percentile in the previous presentation RY provided earlier in the year. The previous cost curve had a date of 2018, but this time RY does not quote a date.
This would suggest of course that the costs of other operators has in fact gone up, whereas RY is still using the cost data which goes back to 2017, which the QP Kevin Wright was happy to sign off on in the PFS. So is RY saying that other's costs have risen/mined grade reduced, but AMC's have not, if so perhaps he should provide some commentary around this.
This is an important metric IMO in terms of financing (staying in the 2ndQ and not venturing into the 3rdQ) and so this may provide the project's flexibility that RY has talked about, i.e. the potential to use contract mining, which whilst bumping up operating cost will reduce the initial capex and 2ndQ position could be maintained, this also interplays with the additional by product credits from a copper concentrate which will lower C1 further and any plan to mine longer life/higher throughput/and so lower mined grade which will push up the C1.
I also see this C1 metric as key to any T/O by a buyer who wants to operate the mine through the whole cycle. Did anybody question RY about this? thank you. RL.
This is RY's presentation from the recent 121 in Hong Kong:
and the pdf presentation:
Thank you to those who have provided feedback from the investor event, I do have some observations/follow up questions around what RY said about the copper concentrate and still maintaining the idea that the project will transition to LGM after 2 years. I would ask what is the benefit of this?
Need to look at the numbers in a bit of detail as spending per Edison $80m on a copper processing facility and then only having the major payback (0% payability up to 90%) for 2 years before spending a further $115m on a smelter where that payability on the copper is only 15% better (i.e. 90% payability vs 75%) than what RY could obtain by just waiting on the LGM. It may be better in discounted cash flow terms to ignore the copper concentrate and go straight to the LGM from the off, or that 2 years quote of moving to the LGM may not be entirely accurate. Edison have the full LOM benefit in NPV of the copper concentrate vs Toll Smelt at c$200m.
Also I suspect the prime driver around the copper concentrate is the ability to derive a streaming deal and upfront cash, as being able to get the equity part of the financing deal sealed is IMO going to be the most difficult challenge the project faces, even if AMC only need to pony up 25-50% of that equity as their contribution per any JV, and so anything that can reduce that equity need will be extremely beneficial to all parties that may be involved in development IMO.
That said I do start to get the impression that RY has no intention to do anything at the moment in terms of project level deals that could muddy the waters for a potential buyer who may want to take out the project on a clean basis, (he talks again about not wanting to put any tension into the project), personally I have no problem with this inertia while RY needs to do lots more engineering work to prove up exactly what form the project will take and what it may be worth. I don't see any need to rush into a JV that could effectively take outright sale off the table.
Whilst I ponder the copper concentrate issue a little further if anybody has anything to chip in from what was discussed in this area by RY it would be greatly appreciated, thank you. RL.