Joe Lowry interview, page-21

Thanks for your post SOS.
I think you come across as a very reasonable commentator on the lithium sector and more balanced and knowledgable than most - but, in this case, I'm not quite sure of the real point of your post.

This may seem a bit confrontational - but I'm really just trying to lay things out to see what it is that you're trying to put across here. And to present something that may get a bit more detail out of you.

You probably should first make it quite clear to the people here that you have a business relationship with Mr Langford and, in at least some respects, in direct commercial competition with Joe Lowry. It should come to nobody's surprise that you wouldn't be in the habit of agreeing with him about many of his views of the industry.

Surely you're not suggesting that you, or your colleagues in MM, are the impartial judges of quality lithium stocks or, after such a short period, already have superior experience and knowledge of lithium production. Are you?
We all do our research and filter out what makes sense and what doesn't.

Sometimes our investments get in the way of seeing things as clearly as we should.
(this clearly also applies to me. I focus on the fundamentals I see - and often disregard the technicals as something that will ultimately look after itself. I think you share the same view.)

Joe Lowry has made enough good predictions, and shared enough broad knowledge of the sector that he has my attention and respect.
He predicted the rise of Argentina this year. That has definitely happened.
He predicted the processor squeeze of last year. That happened too.
His faith in Galaxy's management seems to also have been well-placed as we have come through a very challenging year with good gains.
The only one that hasn't eventuated is the take over of Galaxy by Albemarle.

I'd like to remind you that there was a very popular post 6 months ago where your colleague praised JL as a highly reputable source. It was only when JL actually appeared in the HC forums to publicly contradict some of the nonsense about hard-rock vs brine and BS battery quality theories that were gaining traction that he became persona non-grata.
Then the gloves came off - it would be fair to say....

Since then he has been described as a partisan hack on every forum where he is not as enthusiastic about the prospects.

Would it be fair comment to say that your different take on lithium from JL is perhaps skewed by the fact that he rarely mentions the lithium companies that you favour?
That doesn't necessarily make him ignorant. Just that he weighs them differently to you.

It's reasonable that JL, a person who has been on all sides of the industry for 20 years would have at least something to offer - just as it is also reasonable that you may also have some specific research that contradicts with him on certain points.
But to discount him entirely on hard rock?

He travels the lithium world. Advising producers, buyers and sellers.
You have said you specialise in China.
To discount his views wholesale I believe is a mistake - particularly when he couches his opinion in a pretty down-to-earth way, without ridiculous hyperbole - and admits his mistakes humbly and notes the achievements that he didn't predict or foresee.

I never see the same reciprocated by other commentators - giving the nod that Galaxy's achievements this past year have been noteworthy.
A kind of a lithium tall poppy syndrome has sprung up where the down-ramping just moves onto a different target after each box is ticked at Galaxy. Beneath it all seems to be a lack of interest in the fine details and a set of home-spun theories about why Galaxy has it so wrong. Not necessarily you - but those who know better on some of these forums do little to correct claims that are clearly incorrect about production amounts, impurities, ramp up period, recovery, costs, time-frames etc.

Joe Lowry has admitted that he has worked for Galaxy in the past. He has probably been paid for his services by virtually everyone in the lithium world by now.And probably by the companies you are invested in. He has been paid by Orocobre too and still says his piece about them. He is quoted in the press as an expert. He shares his take on what he likes and what production and corporate strategies will actually work.
He is definitely not God of Lithium - but his views are widely presented in the media, and his figures are used in broker reports and other analysis.

I rarely ever see a positive comment about Galaxy on any other forum, yet the pricing model and at least some of the optimism in the hard rock industry has come off the back of Galaxy's hard work and progress over the last year - not the least was the increase from $600USD to $905USD contract prices. The successful shipment and now the beginning of construction on our second asset.
Nothing worth giving us a little kudos for there?
PLS paid the ultimate compliment to our management by engaging the same engineering team to oversee the final stages of their construction.

You may or may not be right about battery companies taking over processors, but surely the processors that would be the most attractive targets are the ones that already have some form of contracted supply.
It's reasonable to assume Shandong Ruifu became more attractive as a take over target because they are one of the few processors to have a supply contract with Galaxy.
btw I agree with your take on SR recently. They are too small to be as ambitious as they have been about expansion. That was clear a long time ago and I said the same.

But - just as some mining companies without experience or specialisation in lithium may find it much harder to bridge the gap for the specific requirements of lithium plant design, construction and successful operation - let alone the business of securing and maintaining contracts in the byzantine world of Chinese business - some of these battery companies may be out of their depth moving further down the chain if they intend to build and operate processors and deal directly with mines. There are truly many ways that vertical integration may seem great on paper but end up becoming a devastating bottleneck for new entrants.
I think you've said it before too - the Chinese are wary now after plenty of their forays into mining in Australia have gone belly up. It is now a totally different environment. They are not ready to punce on assets with their cheque books.
They want a clear path to production, not assets.
There are a stack of assets in the world - but the production is still coming on at a snail's pace.

If Joe Lowry isn't up to your standard of insight or impartiality, would you possibly rate Simon Moores as having a worthy viewpoint? BMI have declared that they do not invest in any lithium companies as their gig is more a travelling road-show. He made a strong point in a recent interview about the need for Australian companies to diversify or they could become over-exposed to the movements in the Chinese economy.
or perhaps Chris Berry then?

They seem to have independently formed similar views of the quality and prospects of a few companies, and those that are most likely to succeed at coming into production in the short term. They all rate Galaxy.
Are they all on the take?

I've seen your comments about lithium being all about China.
I respectfully disagree. Hard rock yes.
Clearly, they are the only ones with processors. At the moment.
However, there is a new story starting in Canadian hard rock.
Nemaska and Galaxy's James Bay are now suggesting that these new operations may not involve Chinese intermediary processing steps and will concentrate on North American battery clients.
Even here too in Oz. Down the track a bit we'll get there too.

That is a very predictable (and perhaps only) way forward for a world that may increasingly see lithium and battery production as strategic and critical supply. It will become a favoured tech of militaries, and it will eventually supplant the oil industry and become just as globally diverse.
This increasing global diversification may be more of the emerging story of the next 5 years even though the Chinese are hell-bent on monopolisation.

Brine plants alredy offer supply that can deal directly with battery plants without the Chinese processor intermediary step. Japan certainly is following this strategy of independence.
Korean heavyweights LB Chem and Samsung SDI too I believe are also supplied at least partly by brine from South America. The Chinese have already played hard-ball with them (battery certifications) and they could well be looking for other future sources.
Tesla is surely a company that will eventually bypass Panasonic etc and build them entirely in-house, as is their stated corporate mission to control their supply chain from tech to boot carpet. And there will be others who are large enough - VW etc - who may pursue non-Chinese, or at least diversified, supply contracts and vertical integration.
China will remain important but Galaxy is already establishing a model where it is not entirely reliant on their demand.

Anyway. That is all imo too.
I wish you all the best with your investments.

Cheers