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Could SA now be seen as a better place for investing? Clutching at straws maybe but not many positives out there as we all know
They could be based in New York for all it matters, as long as they are selling everything they produce at a loss it doesn't make a blind bit of difference where they are.
But everything they produce is in SA. So a more stable and business friendly economy may attract the kind of investment needed to keep the show on the road long enough for BMN to prosper.
Errr … and how long before you expect this revolutionary South African Business friendly economy to spring into existence and rescue BMN from going down the toilet?
Well it's happening, whether BMN can capitalise is another matter.
Yeah … but the single most realistically important obstacle and issue isn’t the lack of a Business friendly economy attracting more investors - it’s the plain fact that whatever the volume of sales are. - and no-matter how many containers are reported as landing in the USA - the whole operation is loss making, Not profit making.
No-matter how friendly the business economy gets. - THAT is not going to attract new investors. Only a massive change in the price of V is going to help save BMN. CC has done all he can and now has probably gone as far as he possibly can go to provide the right conditions to capitalise on an upsurge in V prices - if that does not happen soon - BMN is lost, imo.
The company is loss making and has been for a very long time.
Unless the market price of V changes very radically - a business friendly economy isn’t going o be of much help.
Agreed
Lindon: what do you think the ‘massive’ change in V price would be?
Well selling Vanchem was a necessary evil to keep BMN in operation. To survive the next few years now doesn’t require a massive increase in V, it requires a small increase of ~20% back above $30/kgV but it would merely be surviving, meeting debt repayments with minimal capex directed to Vametco.
To actually get back on track somewhat requires a massive change in V price, ~ 50% from current prices and ideally a spike much higher along the way.
Well V price has bottomed now IMO, so we are just awaiting a catalyst for the price to increase. I heard that Chinese rebar standards we're supposed to be strengthening so there's a higher quantity of V in the steel - isnt that set for the first half of '25 sometime.... ? I know they are clamping down on emission's over there right now.
I believe that Mr Coltman has positioned the company to `tough it out'. The V price is going to increase for sure (looks like it is bottoming out just now) but we just don't know when the required surge will come. There are only two primary producers in the world, and the rest are a long way from viable production, so to an extent this is a strategic asset. Our time will come.
The V price has always been volatile but right now there is a clear reason for it - the Chinese real estate slump. If anything, the effects of that are getting worse, so I really don't see where a significant turnaround in prices is coming from. Best hope for V producers is that competitors go bust, but BMN is first in the queue due to Mojapelo's amateur management.
@HarChris - I'd say it needs to be much higher at +$35 just to tread water. BMN now has a smaller output to service the large debt burden. I dont see Craig persisting in a loss making environment for too long before he pulls the plug on it all.
@BMT - They are still no where near sorting out the electricity problem and now the ANC does not have a majority, nothing will get done except arguing. Years away from being an attractive place for business imo.
@BenAlder - do you have much skin in the game here out of interest?
No, that would be incredibly stupid when you look at the facts/odds here. But I do hold some for some insanely perverse reason I cannot fully justify except perhaps to keep an interest here. I might swop them for lottery tickets. Better odds of a return.
'@HarChris - I'd say it needs to be much higher at +$35 just to tread water.'
I did say ~20% higher than it is now just to tread water. Currently I'd imagine BMN's average selling price is about $28/kgV so that comes out close to that $35 and then about $45/kgV to see a recovery of sorts.
Please enlighten us how they are getting 28$ ? Their main product nitrated vanadium is selling at a discount to the market price which is 28$ at best in the USA. Not to speak of any fees to their agent.
Https://www.investing.com/commodities/ferro-vanadium-80-min-united-states-futures-historical-data
Nitrovan carries a premium to that (not a big premium mind)
Fair enough Paul, I thought the most recent US update had it just above $28/kgV and Europe $27.5/kgV, something like that but I'm not following so closely anymore so might be wrong.
Still think it's probably close to that price though.
It was openly admitted many years ago by MN that the Nitrovan premium is negligible and would be continued at the same rate of the prior agreements levied by the sellers.
It was something BMN took on board when they bought the site and agreed to also appoint them as their agents. That arrangement is supposed to end and SPR are due to takeover all aspects of agency when the current contract finally expires.
As for V prices … imo. …. $35 is the break even point after all in costs - and there needs to be at least an upsurge to $40 with a clearly defined ongoing certainty that it will keep going up from that price point - $45 is a price I believe will be required before the company can start to believe it has a realistic chance of not only surviving, but starting to have the wherewithal to start paying down the debt and progressing to much safer level stand alone on its own 2 feet position than it is currently.
Terrible place to invest they said, far too risky they said:
https://www.news24.com/fin24/markets/jpmorgan-double-upgrades-sa-to-overweight-as-jse-rand-rally-on-post-election-optimism-20240618
The ‘market’ seems to have an alternative view. Knives out for RSA miners this week, despite pitiful trading action.