Interesting post.
Let's start with this:
"How much can Mt Cattlin produce in a good year? We don't have a year as a reference point"
What makes you think 2019 isn't a good reference year?
Here's a reminder:
And while we're looking at Mt Cattlin's history, let's see what happened with those product prices, and how rapidly they rose when the supply-demand balance got a little out of whack:
2017; prices going from under 550/t to over 850/t in only 3 quarters:
...and strong throughout the following year:
IMO, considering the way the demand curve is shaping up, this is chicken feed compared to what's coming.
Who back in early 2017 predicted that much growth in pricing within the year?
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Oh, and regarding the comparison of "LCEs", that's rather meaningless as we all know it's ultimately the margins that count.
If company X is producing say 30ktpa of LCE in the form of spod concentrate (circa 240ktpa SC) at say $400/t margin, and company Y is producing 30ktpa of Carbonate at say $8000/t margin, then we have:
Company A: $96M "profit"
Company B: $240M "profit"
In other words, Company B can produce "only" 12ktpa of Carbonate to be just as well off as Company A with 30ktpa LCE in the form of 240ktpa SC, in this pricing case.
Or, Company A would need a margin of $1,000/t of SC to match the earnings of Company B making $8,000/t margin on its carbonate, for the same volumes of LCE in each case.
But you know that already!
BTW, what were the margins on these respective products, generally, last time pricing ran hot? Spod circa $500/t? Li2CO3 circa $10,000/t?
With the recent EV sales numbers and the forecasts re demand, I see no reason for SDV to rather rapidly be expanded to say 50ktpa, after it proves production at initial commercial scale. IMO.
Why chase inferior resources when the angel tears at SDV are there for the taking, and the marginal cost of expansion is better than developing a new project? I'm sure we'll find out soon enough that there's more than 20 years worth of reserves at 50ktpa...? It won't happen overnight, but that's the same for every company.
Good luck!
IMO
DYOR
