I believe that DPM is prepared for such events and the company has signed a proper insurance policy. However, the last announcement reveals that the Friday's outage made some serious damage to the smelter. The company writes:
"...cooling water entered the Ausmelt furnace as a result of the back-up systems for power and cooling water not operating as expected, which compromised the integrity of the refractory lining. As a consequence, and following initial inspections completed on
This outage is expected to reduce 2016 concentrate throughput by approximately 20,000 tonnes. The vast majority of the costs associated with repairing the physical damage are expected to be covered through the Company's insurance program. The response taken by operations management during this event ensured that no one was placed at risk during the outage"
To remind my readers, DPM planned to process 215 - 250 thousand metric tonnes of concentrate at Tsumeb so a 20 thousand tonnes reduction means a 10% lower output (and 2016 revenue lower by around $12 million).
Apart from the loss in revenue, the company has to make some serious repairs.
According to the announcement above, the costs associated with repairs should be covered by insurance policy. But what about the lost revenue? The company did not comment on that issue.
Market reaction on that news was, in my opinion, fairly negligible. DPM share prices lost 4.58% on the Toronto Stock Exchange. The broad market, represented by GDX lost 3.65%