Refineries: Gold Financing, Simplified™
When worldwide industry capacity estimated at 15,000 tonnes chases mine and scrap volumes of 4,500 tonnes, the pressure on margins is relentless.
Competition has not just manifested in refining fee reductions, but also shorter and shorter payment terms. In many cases, refiners are obliged to make a provisional payment on pick up at the mine site. Toll refining becomes unattractive to customers, who have their own cash flow issues and are unwilling to wait and fund the refining process.
To compete, you need a low-cost funding source that gives you the flexibility to respond to price-drive scrap flows and which is free from the headache of putting on and taking off hedges.