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Isn't there also rehabilitation liability costs which what made Boatman make the 'worthless' comments?
“The provision of R6.45bn on Thungela’s balance sheet is over and above the regulatory guidance for miners in South Africa, is in accordance with IFRS (International Financial Reporting Standards) and audited, and consistent with the provisioning norms within the industry,” said Anglo spokesman Sibusiso Tshabalala in a statement.
https://www.miningmx.com/news/energy/46435-anglo-says-r6-45bn-rehabilitation-provision-for-thungela-over-and-above-regulations/
I wouldn’t be surprised to see this back to £4 Monday. It’s pretty clear how dire the capacity in the energy sector is.
More on India......
https://oilprice.com/Latest-Energy-News/World-News/India-Looks-To-Create-Strategic-Coal-And-Gas-Reserves.html
Trek
Thanks for that clearing that up, Tedmak,
Whilst we're on the subject of my mistakes...maybe you can help....
In the past I've said there were no more liabilities...but haven't we got the rest of the derivative to run out too? There will be another R332m of a loss as the API4 has been so high? Is that right?
Hi, Gubby
If you look at the prospectus land interims, there is a provision for the green fund in the accounts but the amount in escrow was short by about 3000M.
The cash on the balance sheet was a separate item.
In effect, the provision is a note that says the money needs to be paid in the future.
Adding the amount in escrow to the cash balance matches the provision.
The company is under bo obligation to add the 3000M rand to the escrow, just to pay the 5% per year.
Like having a mortgage but with a cash balance in another account equal to that number.
It is possible the company will want to keep that cash balance their to take away the uncertainty of the provisions being funded.
Let’s face it, uncertainty on how provisions are going to be paid don’t help confidence in any company.
As an aside, the amount of money the company has made in the last few months has enabled a lot of the uncertainty on paying for cleanup AND the mine life extensions away.
A far cry from the situation when the company was demerged.
Also when we get our fat divi...what do they do with the spare cash? An even bigger div? Possible buy backs.....possible over payment to the green fund again as minimal capex for (they "said" 3 years but who knows).
"paid up"..I mean isn't there a pot or fund already set in place, but we are adding to it continuously to cover future liabilities?
Hi tedmak,
Thank you for your valued post and having the guts to post figures.
This is certainly not a criticism, but isn't the "green Fund" effectively paid up and in fact over-paid as such? So the cash we've been "given" by AAL and the cash earned in most of June is actually ours? I am certainly not "telling" , but asking.
I'm just saying because you might unintentionally be underplaying the value of the company, but I may be unintentionally overplaying it.
I have done a few quick calculations.
Following assumptions are based upon 65USD cash cost (conservative), 15MT deliveries in 2021 and 2022, a discount to API of 20% (it was less than 20% at the interim results stage when prices were lower), and a second half 2021 API4 price of 178 USD, using price to date and the forward curve for he rest of the year. API4 for 2022 is 120USD.
I have applied 7.5MT to sales for second half of 2021.
(All we can go on is the forward curve - anything else is speculation or religion, and am not interested in that).
The end of June 2021 cash position was 3000M rand but this just covers the cleanup liability so I effectively put net cash at end June 2021 at zero.
(This is not meant as a negative because it means we can forget the cleanup issues.)
I make the H2 2021 new profit 371M USD or 197p per share.
I make the 2022 net profit 297M USD or 158p per share.
Taking that together, we get 355p per share.
So on top of that we get the future value of the business going forward, the potential liquidation of the end 2021 stock pile (13p per share using the 2022 forward price and 1.3MT).
So at current prices, we get the post 2022 business for free.
IMHO, there is at least 15 years of coal business to be done (India and China are not going anywhere, unless I am totally mistaken).
Ad this is all based on the current forward curve, which I am bullish on anyway as the northern hemisphere winter risk won’t disappear until late Jan at the earliest. The verbal intervention of China has just led to exchange spec positions being closed. It hasn’t changed the actual position on the ground. When the rolling blackouts end, then China and India (which gets forgotten) can be more relaxed.
On the rail situation, it will be resolved (no idea when) as it is in everyone’s interest to get the product sold. The government gets royalties and corporation tax and Transnet gets transit fees.
Am happy for my numbers to be interrogated/critiqued, but please, no ramblings or unsubstantiated/unsourced ‘news’.