Running discussion on SP, page-28638

Understand your point. My general view IMO is Australian companies and American companies tend to be more conservative in their approach to takeovers, relying on NPV/IRR calcs and in the current market I think they won't be thinking of any. Given the reduced production in PLS, in particular, and C&M of Wodgina and noises around profitability pricing hearing from AJM and MIN, the first noise you get, IMO, in TO activity is in 'under-priced' existing producers (as price turn it goes straight to there bottom line noting if you take over a producer you are already in production as against having to build a mine). It will be very interesting what happens in regard to the sale of Greenbushes, and what price is received and the potential buyer, noting Tianqi sale of part of its stake is probably the result of its mis-timing in buying a stake in SQM as well as carbonate and hydroxide prices also falling over the last few years

BHPB/Rio/FMG have no lithium mining experience so I don't expect them to TO an explorer btw in totality, so suspect at best they may take a stake in an existing producer IMO only. Even looking at WES, my view why it went for KDR was because of SQM already having a 50% interest in Mt Holland. If look at Mt Marion, Ganfeng held nearly 50% of the project, hence getting MIN into the market. Then in terms of Wodgina, MIN gets Albermale onboard - note what I am really saying is it is the internationals (your Albemale, SQM, Ganfen etc etc) that are the key here, and at the moment most of them are not looking great on the balance sheet. Given Albermale and Tianqi's involvement in Greenbushes, I wonder whether any of these Australian producers would seek a stake in that (and if I were to have a tip for a potntial Australian player, FMG?)

Until the lithium market turns, or there are signs of it turning, and the first sign is excess capacity is starting to be reduced, personally I don't see TO activity (unless it is Chinese entities who take risks, and then you have FIRB saying no anyway) in teh short term, and yes I am likely to be wrong LOL. FMG is a bit of a smoky given AF likes having a go, but I suspect your BHPB and Rio would seek a partnership with someone who knows what they are doing in lithium (refer 2nd paragraph), and the question is who is that someone in this current environment.

I don't see M&A for at least 6 - 12 months, and the first sign to watch for is the lithium market turning, spodumene prices increases, stockpiles reducing. And the biggest kick would be IMO the market believing that the growth trajectory for EVs is returning in line with achieving 2000 GWh by 2030. At the moment whilst EVs are growing, they are not growing IMO in line with the initial 2018 or 2019 forecasts. That in part is why the 'over supply production capacity conditions' in spodumene production have been longer than expected IMO, with obviously an impact on spdoumene prices etc etc

Ultimately for an explorer, any TO is likely to come from someone who has lithium experience IMO. If you look at AVZ's share registry, it already has a few of these onboard - and then you have FIRB's noises (refer back 2nd paragraph).

A bit of a ramble to really say I don't know, so just hypothesising myself. If others have views please share.

All IMO