Michael Garcia: Yes, I think at the end of the day, it comes down to economics.So we have to have a good understanding of our internal coke production cost, including the yield loss that you’ll get in coke when you buy it externally and transport it here, but certainly if the economics change significantly in that decision internal production versus external purchase that’s something we’ll be tracking and be aware of and prepared to act on it.
Lucas Pipes: And how quickly could a switch occurs that decision you have to kind of make once a year, or can you be flexible as the year progresses and supply demand changes?
Rajat Marwah: Yeah. No, we can we can be pretty quick in that.It’s not within days, but probably within months, we can we can switch. We don’t have to wait for a year. Because what we do is that we do contract out based on our optimum production internally and if we have to switch that based on opportunity available in the market to buy at a price which offsets our own production then you have then we have that flexibility and we can move quickly within months.
Lucas Pipes: Very helpful. Really appreciate all the color and continue best of luck. Thank you.
Rajat Marwah: Thanks Lucas.
Operator: Our next question comes from the line of Ahmad Shaath with Beacon Securities.
Ahmad Shaath: Hi, guys.Just a really quick one for me on the EAF project. Did I read that right? The hybrid scenario is not on play anymore and you guys going to start commission on both EAFs, what your thoughts on the on the grid connectivity?
Michael Garcia: No, I think hybrid is definitely still in play, but what we mentioned was that we wanted to emphasize that we will be able to match our current output with only running EAFs coal charge and the power that is available today and with the recent decisions by [Indiscernible] and the completion of the system impact study.So there’s been a full kind of understanding of the impact of our power demand and the nature of it by the operator of the grid in Ontario. And they’ve issued some conclusions based on that.However, we still have the optionality to continue to run our blast furnaces and take advantage of hot metal from those blast furnaces at a reduced blast furnace rate to augment our production through the EAFs if we want to increase the total amount of steel produced and again, that’ll go back to the economics and how that decision looks from an economic perspective.
Ahmad Shaath: Got it. That’s very helpful. And, maybe alittle bit related on that. On the carbon tax credits, I saw the, at least from an income statement perspective, the number was a little bit higher, but it doesn’t look like it had a big impact on your cash flow.So maybe that’s one for Rajat, just to walk us through as we go forward. How should we think about that? All the blast furnace is continuing to operate.
Rajat Marwah: Sorry, Ahmed, can you repeat the question?
Ahmad Shaath: Yeah. I’m just trying to understand the potential impact on your cash flow from the carbon tax payment, because it was substantial in this quarter, somewhat or CAD12 million.I haven’t seen that number in a while. Maybe help us explain why they’re a little bit bigger, but from a cash flow perspective, it doesn’t look like it, in fact, operating cash flow.So just trying to understand how it will impact your numbers.
Rajat Marwah: Got it. I thought government tax.So yes, carbon tax, so the way to look at carbon tax is, roughly pay on 5% of our emissions, which is roughly 200,000 tons and the price for this year is CAD50 million and for next year is goes up by another CAD15 million.So that’s how the total cash out comes out and normally if the cash out goes in November. From accounting perspective, it was based on the estimates that come out until the time they are finalized those estimates are looked at and the accounting happens and that’s how you see a big number coming in this quarter, which is the September quarter, but from cash out perspective and total expense perspective, it still remains a simple math of roughly 200,000 tons on an average and the price that gets published each year on what we need to pay it on.
