AJM (from Mar20 Qtly): "Operating cash costs were reduced to US$345 wmt (FOB), compared with US$354 wmt in the preceding December 2019 quarter." Would this not imply that costs to produce a dmt, are ~7.5% more (USD371)?
LTR (from PFS): Operating Costs USD406pt. No plant.
AVZ (from DFS): Operating Costs: USD87pt (what could possibly go wrong with that?). No plant and fraught with difficulties.
MIN Mt Marion: ? (i think I saw once that Cash Costs are around USD370?)
ALB/Tianqi Greenbushes: ?
WES/SQM Kidman: ? No plant.
MIN Wodgina: ? ALB controlled and no Tantalum credits
PLS (from Mar20 Qtly): "The recent improvements to lithia recovery provides confidence that the Company’s long term unit costs should trend towards US$320-350/dmt CFR China or US$270-US$300/dmt (FOB Port Hedland and exclusive of royalties) on a SC6.0 basis once design plant production capacity is consistently achieved".
PLS has a larger plant than AJM which would imply lower cash costs PLUS Tantalum Concentrate byproduct worth at least USD50pt (over USD100 in 2018).
"Spodumene concentrate prices reported during the Quarter by 3rd party agencies included US$465/t CIF China by Asian Metals, US$475/t CIF China by Shanghai Metals Market, Australia, US$430/t FOB by Benchmark Minerals and US$419/t FOB Australia by S&P Global Platts. Pilbara Minerals notes there was likely further weakening in Spodumene pricing during the latter part of the Quarter and into the month of April".
Australia is supplying the world with Spodumene, yet oversupply persists. Is it just Greenbushes (ALB/Tianqi)? Is it cheap, low quality Chinese (Qinghai) and SA Brine (SQM/Tianqi) being reprocessed? When will Spodumene shortages kick in?
Should Australian Spodumene producers organise a price setting collective? Then arguments would occur over planned production limits. PLS first mover status is still an advantage. Our plant is built, expansion planned, offtakes organised awaiting market demand.
If PLS cannot be profitable ..... WHO WILL BE?
Which of the above miners/producers (and hopeful start ups) are living in dreamland? All of them?
Qinghai, SQM/Tianqi and Greenbushes (ALB/Tianqi) are all playing squeeze out the little guy and freeze the startups to maintain market share ... keeping Lithium prices low. Their Hedge Fund owners did similarly all the way along, organising the shorts to hold back financing for potential start ups. We all felt it. Its free market, dog eat dog. We're toughing it out. Cue Gloria Gaynor.
There will be an array of Li-ion EV/ESS batteries to choose from in the future. Whether NCA million mile battery, NMx no Cobalt, thermal stability and eventually Solid State, maybe ... they'll all suit consumers needs.
An Uberised low cost, AI monitored (for recharging) consumer service at the ever ready. Or vanity personal ownership of limitless (maybe personalised) design, accompanied with a mobile recharging service if power failures occur. Or even standardised EV batteries for ease of swapping.
Elon Musk famously said that Lithium is just the "salt on the salad". A very dismissive comment like supply was of no concern. Certainly at the time, Lithium costs were only 2% of an EV battery costs. That was when EV battery costs were closer to USD200 though.
Every effort is being made to reach that elusive USD100 EV battery costs threshold. Every production cost scrutinised. Now its been breached, production scaling and technical design improvements will smash it ... and (hopefully) take focus off Lithium costs. No expensive Cobalt is significant, especially with known Cobalt ore reserves only sufficient to support NCM/NCA EV battery tech production until ~2026 (per Svolt NMx presentation).
One thing Elon Musk has repeatedly said over the past year is, how he is concerned about the supply of EV batteries for all his planned production. This is stimulating Stages 2,3 and 4 of the EV battery chain ... which has to benefit upstream Stage 1.
The concern of where Lithium will be sourced caused the 2017 Lithium wave. OEMs still make those same sounds today. The question remains who can be the lowest cost, ethical producer ... and who will be standbys, if supply shortages of incumbent producers JUSTIFY the CapEx spend on them. Planned expansion by incumbent producers will precede standbys. Australian (not WA, as CXO emerge) Lithium is the standout. Who will be the lowest cost producer there?
Imagine PLS at Stage 3 production of 8mtpa, in a world of rational Spodumene pricing. Not to mention downstream investments like the POSCO JV. We still have a MOU with Great Wall, in that regard.
Greenbushes depth of mining costs is mitigated by their outstanding grade, however if they expand to maximum planned production, they will limit their resource to less than 10 years. In 2017/18 some valued it at ~$A10b, not now, of course. Also over the past year, many have commented how LiOH does not travel well and needs to be used ASAP by Cathode makers, so conversion plant location is now an important consideration.
Similarly Wodgina is now controlled by ALB, with questionable processing ability which ALB flogged off to MIN as part of the deal. Suckers?
AJM has debt of $A250m and now selling its equity/soul to kind New York bankers. PLS has net debt of ~$A40m.
Mt Cattlin's ore reserve is tiny, making it irrelevant.
AVZ's ManoNoNOOO Project is a delicious little mouse that the Big Cat Chinese will play with until they secure 100%. They (effectively) control the infrastructure. Time is on their side. Tick Tock.
LTR/WES (Kidman) will have to wait until the CapEx spend is justified by EV demand.
PLS will succeed, IMHO. Of course, if you are myopic and linear minded then there are concerns. However, life is paradoxical ... and the only constant is change. The big picture of the EV disruption compels it (PLS success).
PLS Price at posting:
26.5¢ Sentiment: Buy Disclosure: Held
(20min delay)