Lead Into GoldJeg Elsker
I’ve been meaning to write this article for a few days now, but every time I start it I think of different angles to look around the recent CCP announced plan to “Kick Tech in the balls”. I’ve read other bloggers musings on how this new announcement is likely to affect the markets. How it’s going to affect Technetium prices and how overall that will affect the OTEC cartel and their price fixing. For those of you that missed it I did a rough summary of my thoughts on the various proposed solutions to the “Technetium Problem” where I poo-poohed the very concept of what CCP have announced as step 1 to a solution; Alchemy.
So, what CCP have announced is that they are going to introduce a Lead (Cobalt) to Gold (Technetium) system that will act as a pressure release to prevent the cartels from pushing the Technetium prices as high as they want. The way I read it the dev blog boils down to this:
20 x Cobalt
= 1x Technetium
Now I started looking at the maths of this and realised I was out of my depth. There is however a very good article on the announced reaction here: http://eveblog.allumis.co.uk/?p=1048. I am not in a position to question the numbers given there, and the assumptions are based on some numbers he had hanging around, they have changed a bit, but the result still works out about the same anyway. The important thing to note is this :
Alpha reaction (the existing and normal reaction) Generates about 18.7 billion ISK of sales a month
Some quick maths based on the numbers in that article suggest that the raw Technetium for the “Alpha” (Current) reaction works out at 19 Bill a month.
The running cost for the POS runs to (again based on the above article) 1.5 bill a month for the four 4 posses, so 375 mill per pos per month.
So. From there let us boil it down further.
Maths – I nom them
To mine the 1 months’ worth of Technetium uses 2 POS = 375 Mill x 2 = 750 Mill ISK costs
To mine the 1 months equivalent of Cobalt uses 40 POS = 375 x 40 = 15 BILLION ISK costs
The Technetium in the above as we already mentioned is selling at or around the 19 Billion isk mark for those two moons. 19 billion – 750 million running costs = 18.25 billion / 2 = 9.125 billion ISK per month, per moon of profit.
If the cobalt above was worth the equivalent of Technetium in the above example, then we are saying the 40 moons are worth 19 Billion. So 19 billion – 15 billion running costs = 4 billion ISK. 4 billion isk / 40 moons = 100 million ISK per moon.
If you were to include the cost and time of hauling the raw minerals and fuel then it gets even worse. I would expect most people will run the alchemy on the same moon as the Cobalt is being mined though, and simply haul the Platinum to those moons. It is still going to be at least an order of magnitude more effort since you have 20 times the posses to fuel and manage.
And there is the thing. The cartels can easily rub that tiny margin out by downing the price to 15 billion, the Cobalt becomes effectively worthless for Alchemy, the profits still over 7 bill a month per moon for Technetium.
All of this is back of a cigarette packet maths based on the announced reaction, the numbers are obviously subject to change even after they are released to tranquillity, but based on these numbers this will make no difference to the overall picture. The OTEC cartel will still have a huge control over the market well over and above any effort they are making, and Alchemy has done nothing in real terms to fix the actual issues.
CCP’s nerf hammer on the Technetium problem.
CCP have said this is the step one. Hopefully step two is going to be something that will actually make some impact.