Noranda Income Fund Unit T.NIF.UN

RE:RE:RE:RE:RE:RE:AGM Toronto

[Bigbird9999]

Not sure what they were talking about.  It sounded like Quebec Hydro would somehow participate or give rebates on capital projects that reduce energy consuption.  Electrolytic Zn production requires about 4000 kwh per tonne (assuming all energy is electric).  CEZ's rate from Quebec Hydro industrial rate is about 4.25 cents so electricity cost is about $200 per tonne = ~$4.25 million per month ($50 million per year).  Quebec Hydro's Industrial rates are already among the lowest on the planet.  Power consumption is monitored very carefully, minute by minute to control peak load and accurately measure the power utilization efficiency.  There is no "magic" technical breakthrough that will yield more than an incremental (1 or 2%) reduction in power consumption.  On a $50 million power bill 1%  is a lot of money ($500 k per year).  That being said, any CAPEX would have to be justified by the electical savings and rebates from QHydro.

The low hanging fruit of electrical savings was picked long ago. CEZ has been continuously applying technological improvements to reduce power consumption for the past 50 years.  There are not many stones left unturned.  Any CAPEX that  would pay for itelf in power saving has already been done.  A rebate program from QHydro might help justify a few marginal projects but there is no major power cost reduction to be had by implementing some "new" technology because there is no such technology. 

BB