By K. Deligiannis
Provisions to ensure that already extensive arrears owed by state-run and owned mining and metals works Larco towards the Public Power Corp. (PPC) will not increase, as well as condition to cover a portion of past debts, are included in a new contract between the two sides.
The south-central Greece-based ferro-nickel producer is a major energy consumer, with its sole power provider being dominant PPC, itself a state-run and cash-strapped utility.
Debt-laden Larco has promised to, from now on, cover 4.1 million euros of monthly electricity consumption, out of a total of 4.5 million euros forecast for monthly production. The remainder of the sum will be covered by “guarantees”.
According to reports, the greater part of the company’s guaranteed revenues will come from a contract with Finland’s Outokumpu, which is budgeted at 2.5 million euros per month, and with a provision in the new contract stating that the money will be directly transferred to PPC.
Outokumpu is billed as a global leader, and first in Europe, in the production of stainless steel, and is currently one of Larco’s biggest customers.
Another provision stipulates that Larco will provide the ATHEX-listed utility with 950,000 euros worth of lignite from its northern Greece mines on a monthly basis.
Regarding the payment of past arrears, a formula was cited linking the average annual price of the metals produced by Larco, with the first threshold being in excess of 11,000 euros per ton. Specifically, in case the price is between 11,000 and 12,000 euros, then the company will pay eight million euros of the arrears; 20 million euros if the price is between 13,000 and 14,000 euros.
