Credit committee paperSection 03 / 07
03 · Unit economics
Unit economics per ton of RB2
Arnot keeps R378 of every R2,006 ton after logistics, royalty and Lancaster's finance cost. The facility costs Arnot R8.61/t.
Exhibit 3.1
Per-ton profit and lossR/t
| R per ton | Scenario |
|---|---|
| FOB Durban revenue ($121 × R16.58) | R2,006.18 |
| Mine-gate (FOT) cost | (R800.00) |
| Road haul: mine to Sunberry siding | (R150.00) |
| Transnet rail incl. port handling | (R660.00) |
| Royalty (0.5% of gross sales) | (R10.03) |
| Margin before finance | R386.15 |
| Facility interest and fee | (R8.61) |
| Net margin to Arnot | R377.54 |
Flex the market
Changes apply across the whole business case.
$121/t
R16.58/$
$98/t
Breakeven price at R16.58/$
R13.44/$
Breakeven FX at $121/t
Exhibit 3.2 · Revenue bridge
From R2,006/t of revenue to R378/t net margin
Revenue Operating cost and royalty Lancaster interest and fee Net margin to Arnot
Annual programme: 600kt, R1.20bn revenue, R227m net margin
Exhibit 3.3 · What it means for Lancaster
Finance cost is a rounding error in Arnot's margin
Margin covers finance cost
45x
R386.15 ÷ R8.61
Facility cost per ton
R8.61
0.43% of revenue
Price cushion to breakeven
19%
$121 vs $98
Arnot net margin, year 1
R227m
600kt exported
Note · Finance cost per ton is total facility income (interest plus raising fee) spread over tons exported in the year.