George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
"As mentioned earlier, the steelworks is a continuous process, so if the blast furnace stops operation, all the plants that use the molten iron from the blast furnace need to cease their operation as well, meaning that the whole steelworks would have to be shut down."
This is why steelmakers HAVE to keep their supply of MET Coal up.
The high was earlier this week at 83.5p but Putin has panicked people to sell indiscriminately giving me the chance to top up at just under 70p. That is 16% discount when the MET coal is actually increasing in value.
The price in The States was level at $365 but there was a price hike in Australia with someone, probably Chinese paying $475
This is from another BB
"Highest incremental bid reported at $475/mt FOB Australia for
April-loading"
+$5 is actually worth a further 21p a share to BEN based on their ambition to be producing 2m tonnes per annum. What a fabulous Company.
https://www.argusmedia.com/metals-platform/price/assessment/metallurgical-coal-high-vol-b-fob-hampton-roads-PA00128862100
Last night METCoal went up $22.50, the ambition of BEN, after an acquisition or two, is to get to 2m tons production per annum. The $22.50 will go straight to BEN's bottom line, ie +$45,000,000 x a PE of 10 (slightly less than Warrior Coal their nearest listed player, and the increase in the value of BEN is $450,000,000 which is 1.6x the entire market cap of BEN now. To put that in share price terms that is an extra 96p a share = 156p a share. If the MET coal goes up another $22.5 that's another 96p on the BEN share price!
This is why BEN is such an exciting Company.
Now take this a step forward, 2m production at $360 pt, profit $230 pt = $4,6b =$13.07 a share. Yes a few things have to fall into place but this is possible, even likely, a year from now.
The cost of extraction washing etc is $95 as stated by AW in one of the SR interviews, there are some royalty payments on top. But MET Coal B is now $360 a ton so the margin is actually well over $200 pt. The most important part is when you mine 1000 tones you get approximately 500 tons of clean coal to sell. When you mine gold or many other precious metals you get 1 or 2 grams of metal per tonne and the crushing and extraction costs are way way higher than MET Coal.
Not me, I'm a mountaineer, the higher the better, still buying more. Don't average down, always average up is my motto, this will be over the pound level in a month or two. The fundamentals here are absolutely outstanding before this latest deal, after it, I suspect this will look very verycheap again.
$6m is quite a lot of cash when you can take over other coalmines on royalty deals and he still has half the last cash left and cash rolling in every day. So this deal could be a really big one, possibly even doubling the size of the Company and the share price. I think we will see £1+ in the next couple of months. Whatever, sooner or later we go through the £1 level imo.
Big Funds are throwing cash at Ben but they do not need cash, unless they plan to make a very big deal. More coal, more equipment all at a bargain-basement price. So this is why the market was strong yesterday, this could be through £1 very soon imo
Metallurgical coal is a vital part of the steel value chain today – and steel is a material that will continue to form the backbone of the world’s infrastructure development for decades to come. Steel is also fundamental to the transition to a low carbon world – given its use in much of the required equipment and infrastructure for renewable energy – and is central to the achievement of the UN’s Sustainable Development Goals.
https://www.mining.com/anglo-american-switches-on-new-aquila-met-coal-mine/