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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
So explain to us all then in your infinite wisdom, Bigbadbob79, why they don’t do this straight away, right now?
Only takes them not even 1% of total shares to go over the 30% rule where they’d be required to make a bid for the company.
They furthermore would also risk the mine going bankrupt, which will result in a liquidator being appointed and thus any influence of the winding up process would be fully mitigated.
Avani has had plenty of opportunity to take this over if they wanted. And Avani can also buy coal anywhere else it would like. They’re coal brokers, not miners. They clearly see a way forward which stimulates them to put money up as working capital and providing financial support.
The whole take-over story is wearing very thin, but people keep going on about it. If Avani wanted to, it would’ve happened already. Long before a new CEO was announced. They want rid of the management, this mine can produce and can be profitable under the correct management, everything is already in place, the miners are there, the equipment is there, the rail track is there, the wash plant is there, the off-takes are there. Just need trains… and the trains is where the previous management failed this company so massively. New CEO has got to get trains and get rid of the excess weight in the board of the company and abolish the bonus structure that was completely abused by previous management.
Latest working capital RNS stated that anything over $120 would go towards paying off this financial agreement.
One could derive from that, that this is a breakeven point. AW has always been very secretive with the actual cost
and hinted here and there, but never confirmed anything as it’s deemed competition/business sensitive information.
The financial arrangement entered into recently would obviously not run at a $85 loss a tonne to the company ( 205-120 ),
as this would bankrupt the mine in a matter of weeks, which doesn’t help anyone, and no, not Avani either before the take-over conspiracies start again.
The guy was a dozer driver who got sacked after being caught under the influence of drugs whilst on the job.
Then he had a rant on Facebook blaming everything but himself and trying to put the company in a bad light.
But we will stick with your analysis RPG7. You are indeed correct that this is deramping, however rather than it being me,
it is the ex-employee that is trying to do it.
If you set a limit sell for your shares at let’s say £1.25 for example, a price you do not expect to be reached quickly, you tie up your shares and they can’t be used by shorters. Simple solution to these guys “borrowing” your shares!
Makes total sense to suggest a mine isn’t profitable after a company like Avani buys 30% of all the shares.
I mean,… what do they know? It isn’t like they’re in this exact business, deal with the sale of coal to
steel producers or understand anything about financial reports, broker notes or company accounts, right?
Derampers… pfffthhh
In simple terms
They pay £ 0.05 per share and they are worth the same as the other shares, currently £ 0.1675
which means they are in profit for + £ 0.1175 per share once they are added on the 11th of may.
Good deal for them, not a big deal for us, albeit a dilution of another 550,000 shares which will
share in the dividend/profits.
Can’t base the health, profitability and future of a company on the actions of one of its shareholders.
Whatever reason MBU has for selling their shares or reducing the amount they have is
most likely not related to Bens Creek.
MBU has investments in numerous other companies and also has several liabilities it needs to address.
They’ve been indicated here before. Similar to the John Story situation, whatever made him sell, who knows.
We can all speculate but the financial decisions of shareholders aren’t known to us. We do have private investors telling us here why they’re bought and sold. But the fast majority of shareholders will not divulge any information or details, and why should they.
If I was a die hard Bens Creek holder, here for years to stay but get an unexpected financial development which requires me to consolidate finances, I might need to sell shares.
Maybe that’s what MBU needs to do? Or maybe not. Nobody except MBU knows.
Well, according to Wilbur, MBU are either de-risking or needing to turn over some profit, but how do you know this?
Are you guessing Wilbur, work at MBU, or have access to information not known to others?
Seems that when we don’t get news or updates, we just make it up ourselves?
What is all this talk about missed targets, HWM’ers not being there, promises not being delivered etc etc.
You don’t know anything - it’s all speculation. Many companies don’t release any information at all, you’re lucky if you
get 1 RNS, a shareholders meeting and accounts a year.
The vast majority of the coal is already forward sold according to the boss, he says things are fine.
He doesn’t and he shouldn’t have to give an update on every single train, development, sale, issue, delay or whatever else
people seem to think he needs to inform them on.
Let the miners do the mining, you’ve done your investing, either stick with it or sell it, but don’t speculate on
anything you know nothing about. If we are all just gonna guess what’s happening, then I’ll say I think 17 trains have left Bens Creek this month because, well that’s what I’m assuming , is that more helpful?
Zimbabwe? You're staying right here Pen, along with the rest of us!
Ben 4 Life!
Need some folk to buy and stick this in their pension pots, cause it's gonna be a cashcow for years to come,
I should say decades to come.
Whatever anyone says, metcoal is going to be around for a long time, playing a vital part in
all the infrastructure, wind power development and carbon reducing industries.
Don't be fooled by this price, it's impressively undervalued, we just need a few more long termers
to counteract the traders that got a hold of this share. When they disappear, there's no stopping this train
to at least the broker's note valuation of £0.86 a share.
It'll get there, and we will all kick ourselves when we haven't topped up what we can once the
Ben Train leaves the station and heads towards its proper valuation.
It’s just a recovery period. Lots of buyers bought on a quick profit basis but the market didn’t respond as they thought.
There is a big difference between people who know the business, what’s happening on the ground and the ones that look at graphs all day and trade on figures representative of the daily market alone.
There’s nothing wrong with the company, the mine, the equipment, the team or anything else.
Just hang back and if you can top up a little at these prices.
MBU reducing its stranglehold on the shares is only a good thing and remember that certain steps were taken in the past too to separate Ben and MBU. Like the moving of the head office and the railway line purchase.
All just to make the long term setup better for long term holders to take dividend for years and years to come.
WH Ireland sees fair value for this at £ 0.86 a share @ $ 225/T of metallurgical coal.
That’s where we are heading, I take a broker note over any self proclaimed experts
who spout rubbish over here talking this down constantly,