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'Because nobody wants them', so you are speaking on behalf of the vast majority of shareholders then?. Or could it be that it suits your book at the moment .
Because nobody wants to buy them and many holders have seen 80% of their value evaporate so might as well hold on and hope for a miracle?
Mick. The issue is the $120 doesn't cover cost of production. So the company is locked in a debt spiral regardless of coal price. They will run out of cash again very soon. Then what?
There are just shy of 400 million shares in this company, how many have been traded in the last 3 days? Vast majority have not been traded -why is that?
Production is set to get a massive boost - all things being equal this should average down the average cost of sales…… therefore I am expecting some positivity and SP growth as the year progresses. Mind you I’ve been wrong before!!! Lol gla
I imagine steel production will slump in the States considering there is a war between russia and Ukraine, China sabre rattling with regard to Taiwan ,North Korea threatening to go to war with South Korea .Russia sniffing around other Baltic countries , Israel at war with Iranian proxies. Haiti kicking off. If by some mischance the orange chump gets elected in November he's threatened to pursue isolationist policies which will embolden russia ,China and North Korea. Even the orange dumbbell will join in the arms race Think more steel will be needed.
What are you guys on about? If prices go up, then yes you are right BC only get $120 - but the balance is still "PROFIT" except it is used to pay off debt. Nothing wrong with that is there?
This was always a commodity play. Met coal pricing have slumped - If they recover, BC will recover. If they don't, neither will BC.
Bigbadbob79
"even if coal prices doubled overnight the company would not benefit". Exactly. Nail in the coffin. It is now locked in on low prices in order to keep the lights on and get loan for working capitol. There is no a going concern issues. The money is just for working capital and for keeping production high and for selling coal at below production cost. There is no longer business here. It happens a lot in the recourses sector and it was how BEN was born and brought out of mothball. It is now heading back there. When the agreements are filled there is nothing less and no business. No one will ever buy the shares or could they issue more shares. Its lights out time.
Correct sushi.
In fact even if coal prices doubled overnight the company would not benefit as everything over $120 has to go to pay off the principal on the Avani loan. $120 doesn't cover operating costs, so even if they pay off some loan, they will have to go cap in hand to Avani for more expensive debt to keep the lights on.
There'll be no bottom feeders here, there's nothing to feed on!
Enter the bottom feeders.
The company is now locked into what looks like contracts that are not profitable for the company. When prices do eventually turn they will still be selling large quantities at lower prices not beneficial to the company and with maximum output they have no room to produce more coal that they can profit from. The company is basically finished. Lots of people were trapped into buying here with promises of huge profits. There never will be profits. When resources prices it fall it has devastating affects on a company and often gets them all mothballed until prices turn and some bright spark buys a company from the administrators. Same thing here is destined. Its mothball and administration. It costs more to produce than what is received. There is no longer a viable business here.
Coming?
Looks like in a death spiral and I say that as a holder. Always was a punt for me but sadly I should have cut my losses. Will x my fingers for a rebound of sorts.
RPG
",i buy shares as an investment , not to trade ."
Nobody is going to trade this with a 50% spread. I also don't see that there is an investment case here. Sorry. I hope it works out for you but I just can't see BEN surviving the coal price returning to normality and burden of very expensive debt.
Avani, who has signed a 400k tonne take-off agreement with Ben’s Creek is one of the main metallurgical coal importers of India.
Leading Indian steel producers, including JSW Steel Ltd (JSTL.NS) and Tata Steel Ltd (TISC.NS) are expected to invest billions in a record capacity increase to benefit from rising domestic demand in one of the world’s fastest growing economies.
A spurt in economic activity and a revamp of broader infrastructure have drawn steel makers from around the world to India, where demand is rising. In Europe and the United States, it is falling. Analysts and company data showed major mills were planning to increase capacity by at least 22 million metric tons in the fiscal year beginning April 2024.
Jindal Steel and Power (JNSP.NS) is expected to add 6 million metric tons to existing capacity of around 9.6 million metric tons and Tata Steel said it was adding 5 million tons to its capacity of 21 million tons.
JSW Steel, India’s largest steel maker, has said in results reports it aims to increase capacity to 38.5 million tons by 2024/25, up from 27.5 million tons domestic capacity now.
None of the companies has said how much it will be spending on capacity, although analysts, who said the expansion was unprecedented, predicted it would be billions.
We expect JSW Steel will spend $2-$2.2 billion a year towards brownfield expansions, scaling up its iron mining capacities in Odisha, raw material efficiency projects and downstream projects,” Hui Ting Sim, an assistant vice president, Moody’s Ratings in Singapore, said referring to the eastern Indian state.
Together with Japan’s JFE Steel, JSW Steel said in February it would invest 55 billion rupees ($662.85 million) in an Indian joint venture to produce grain-oriented electrical steel, used in manufacturing transformers.
Tata Steel meanwhile, is expected to spend between $1.21-$1.51 billion in 2024/25, Lakshmanan R, head of South & Southeast Asia corporates at CreditSights in Singapore, said.
Anshuman Bharati, an analyst at S&P Global Ratings in Singapore, meanwhile, expected India’s steel consumption would grow between 8% to 10% in 2024/25. During April-January, India’s steel consumption rose by 14.5% to a six-year high of 112.5 million metric tons.
Source: Reuters
JohnHenry, absolutely agree with you. BEN will be wound up, mine and plant will pass to Avani. Avani will mothball it until such time as Met B prices increase to a point that paying a contractor (eg MHW) to mine some coal for them is cheaper than market price.
Avani see this as a long term hedge against coal price movements, and it's not really costing them anything as they get the coal in return for the debt funding which they know will never be rapid. Avani will get the coal and the mine, but they have no interest in acquiring BEN the company.
Unless MetB prices pick up dramatically which is unlikely given the short term outlook for steel.
Mine will be mothballed.
But at this price they are so cheap to buy
buy shares as an investment
Added at this price. Rude not to. Can see some good movement this year.
- disagree, will not fall much £ wise ...
Share price 15% down ....2.5p
Adam surely deserves another bonus
Don’t have sufficient data on this one.
So they are managing debt levels at 16% interest rates out of future revenues but there is a stock conversion clause? Anyone care to enlighten me what happens if they default or can’t pay the loan back does it convert at discount to the SP at the time?
Thanks
Theres no investment case here. Ben is racking up debt to survive while MetB prices remain under their breakeven cost.
How is it possible to continuing operating while your losing $10 per/ton
Aussie met price has finally come down. Shame they were the standouts..
"Australian HCC metallurgical coal quotations plunged to a 6-month low, below 275 USD/t, following limited demand and growing supply. Unfavorable conditions and downward trend in the Indian steel market persist, negatively affecting coal demand. Additional pressure is exerted by Asian consumers searching for alternative supplies. Low volume of bids for May deliveries implies further price reduction."
https://thecoalhub.com/world-coal-market-brief-overview-116.html
RPG, do you not question the validity of you investment.
,i buy shares as an investment , not to trade .
I hope that works out for you, but I fear it won't.
Avani don't want the company, it's loss making and valueless. They want the assets, and they're going to get them. Shareholders will be left with nothing IMO.