Maybe any required adjustments to JV conversion plant are not a huge issue, given the midstream product still needs to be reprocessed to hydroxide or carb chems. Meaning, POSCO could still build a conventional facility, but avoid a few steps in the process, taking PLS midstream product to the final steps required to convert to hydroxide. As POSCO have announced, they plan to produce both carb and hydroxide chems, and given the midstream product is flexible in catering for both, that may expand offtake opportunities for more midstream product as POSCO expands.
My understanding of the processes involved, I see the midstream product as a very cost efficient route to producing carb or hydroxide, no need to deal with waste product, ability to cater to different downstream customer needs, all from 1 supplier. The more I research this opportunity, the better it gets. If the Calix tech works as announced, that's a bonus, probably in the form of a green premium, however moving downstream to a part or finished product is still available, see Primary Lithium Sulphate.
However and back to POSCO JV, it would likely reduce the margin for POSCO's 70% stake, while increasing the margin for PLSs' 30% stake. Though, tougher green credentials could erode both parties margins if conventional process is disrupted, or as said, penalized with a carbon tax, for which, both would have a negative impact on the plants profitability, thus valuation.
So yes agree, ESG scenarios are moving quickly, time to pay attention, and not ignore, given the extent of capex being deployed. From a sustainability perspective, I see the mid or downstream route as essential for all spod producers, with that integration de-risking the mining projects on many fronts. If the climate change science is all a hoax, moving to mid or downstream integration will pull a share of the overall supply chain profits upstream to the miners, thus provide resilience in the down cycle and super profits in the up cycle years. If climate change science is correct, moving to mid or downstream integration only increases said benefits, lower energy costs, ability to sell product without a carbon tax, potential green premium, remaining relevant and mine gate open, a win, win.
Though, what worries me about the climate change science, is what out fearless leaders aren't telling us poor plebs.
PLS Price at posting:
$1.40 Sentiment: Hold Disclosure: Held
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