Lunch with Anthony Tse, page-62

Yes. Certainly did.
Shandong Ruifu definitely came up. Ganfeng I already discussed.

Seems some visiting (and tweeting) PLS holders have already expressed outrage at a simple mention of their MD’s CV.
It’s not an insult to have your CV mentioned is it?
It’s purely a matter of public record. Make of that what you will.

The Shandong DSO deal, whether it goes ahead or not, has nothing really to do with Galaxy
and I have no interest in talking about PLS any more on these threads.
They are, by absolute definition, a speculative stock and they will have to wait and see what transpires.
Anything Anthony knew about Shandong Ruifu would also be known to PLS management.
It is up to them to share any info that they would already have with their investors.

This is the real problem for the juniors. Everybody wants production, not resources and promises.
They want tonnage of LCE now, not improbable timelines and inexperienced companies with assay results.
That is it in a nutshell. Crack production and you have access to the inner sanctum where the lake of money flows.
Catch 22 perhaps. But there are no golden tickets being handed out any more.

Despite all the new speculative companies appearing on the ASX, operating mines are still not popping up, or even that close to doing so, and this is a mix of lack of technical know-how (these mines are closer related to complex chemical flow charts), red tape, delays and lack of capital investment - whilst expecting the money to fund these builds will drop from the sky. From China, specifically - and at a time when there are much higher government controls on large off-shore capital investment, and the Chinese companies have good memories of big oz mining deals gone wrong ( I can’t remember the examples he gave of them moment).

AT just backed up his assertion that oz hard rock juniors were realistically looking at 2019 in The Australian.
We can assume that, all things proceeding efficiently, that JB and SDV would then be in advanced stages, possibly with either or both already finished and entering production.
Equipping JB with a processor was important to save on shipping and maximise the standalone aspect of this asset. And also to open up a new set of clients in North America and Europe.
Galaxy is very much a global company.
Pure play lithium - but not wanting to be dependent on one nation (China) for all it’s income.

There was also a very interesting discussion about Albemarle’s position with their share of Greenbushes’ production.
They have a 49% share of Greenbushes that precludes them from selling that product into China.
Raw deal. Tianqi is fine. They bought Jiangsu and already have spare capacity.

The only spodumene converters are in China so Albemarle need to toll their share through the Chinese processors.
It is the reason they bought out a processor recently. It is also the reason why they are currently blocking any additional expansion of Greenbushes. Both parties need to agree and Albemarle is currently unable to really profit from it in quite the same way as Tianqi. The new Kwinana processing plant is entirely Tianqi, which is basically to maximise profit by eliminating shipping costs.

The independent processors that have tolling arrangements are now requesting to be paid in additional spodumene rather than cash. This is because the resulting carbonate/hydroxide is far more valuable to them and they can build their own client base off the back of this supply. This must be where the spot market supply is also coming from.

We also briefly talked about auto-makers. I already mentioned Tesla but his view on the auto-makers were that they were still seemingly oblivious to the supply constraints that they are moving into, and are continuing on their path of announcing plans for their new ranges of vehicles without much regard for how slowly supply is ramping up to meet their needs.
Battery plants were much more aware.
He mentioned the names of at least 3 Chinese companies that dwarf Tesla’s gigafactories.
ATL were the biggest I believe. Something like 3 times larger than Tesla already.
Basically, without China there was no lithium boom.
They were the main consumers and drivers of the industry and the only way that it comes unstuck is if they suddenly veer off their targets to push all their transport into EVs. Pollution levels have reached ridiculous levels. They are heavily committed to fixing this problem now. The rest of the world will wake up soon enough - and Europe will lead the way for them. We talked about Norway (and their sovereign fund) and the evident progress that he sees as a Hong Kong resident, where there are now already more chargers than EVs. He made brief mention of so-called analysts who visited China by staying at the Sheraton for a couple of days. He contrasted that to his own experience, visiting operations all over the country, from the big cities to the back of nowhere, deep in the heart of China and going through their factories.

He then flipped out his phone to show me that his Tesla was charged at 80% back in Hong Kong and that his kids liked to use the cameras to see people walking past and then honk the horn.

We talked about other demand areas too. Grid and other forms of easily deployable and portable battery storage (he had a special name for this type of battery that I can’t recall) he believed would eventually easily supplant EVs as the biggest consumption of lithium. Australian demand for home battery storage may be greater than EVs in the near term, based on the massive solar penetration. Chinese investment in renewables was staggering - wind and solar are gaining ground rapidly on the fossil fuel power generation sector.

Anthony Tse has a fascinating insight into this world.
He mentioned he might write a book about all this at some point.
Certainly would be an interesting read.

btw:
Spare a thought for those crane workers in Esperance that are loading NY Trader 1 with our product right now. Hope they manage to get it all on board safely with a few drinks under their belt.

Cheers again to all holders.