Of Thanks to Floudopoulos
In the phase of non-binding interest in the tender for Larko had appeared six investors, the companies Mytilineos, GEK TERNA in joint venture with AD Holdings, Commodity & Mining Insight UK, Trafigura Group, Solway Investment and Tharisa. For quite some time now most investors have been retiring.
The latest development came with the withdrawal of Mytilineos from the competition, according to information. This means that in theory the interest in the tender remains active from one group, the consortium TERNA AD Holdings, which under certain conditions could participate in the tender, which has been significantly postponed again, with a binding offer.
In any case, while interest in the tender is sluggish to non-existent, developments in the international commodity market and the rapid rise in the price of nickel are estimated to create a new window of opportunity for a successful outcome of the tender.
This is because the rise in nickel prices is a positive development, even if it does not overturn a number of facts and challenges that apply to the LARCO case, such as the financial hemorrhage, environmental issues and the necessary modernization investments required in order to the industry to modernize and be competitive.
It is characteristic that only the necessary environmental investments for the upgrade of the existing method of operation (pyrometallurgy) for the production of iron-nickel, are estimated at 200 million euros.
However, if the new owner of LARCO that emerges wants to take advantage of the positive momentum for the production of nickel and cobalt, then additional investments will be required to change the production method (hydrometallurgy) amounting to at least 400 million euros.
Earlier this month, nickel prices hit a new all-time high of $ 100,000 a tonne on the London Stock Exchange (LME) to fall below $ 37,000, which is also considered a great price for the metal. . At these price levels, the operation of LARCO becomes profitable even though the benefits are “cut” due to the cost of energy.
Finally, it is worth mentioning that the two ongoing parallel competitions by the HRDH and the Special Administrator are essentially the last chance for the industry as in case they are declared infertile, then LARCO will be led to bankruptcy and a final lockout.
Source: Capital
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