Ann: Results of Second BMX Auction, page-196

This is how I see it playing out, so AIMO and DYOR.

The BMX will be used when supply / demand funnymentals are tight or in deficit, but only for spare tonnes. While the Ngunjaju plants' 200kt production is un-committed at present, that production will eventually feed the midstream production, in the meantime, say the next 18 or so months, they will make hay while the sun shines, selling all on the BMX, and free cashflow from same will help fund development and scale of midstream product production.

When other projects bring on new supply, spot prices will fall, and thus, BMX less attractive, when compared to the margins that can be derived from midstream product. If the company already had a midstream product train available today, they would not be selling spod on the BMX, they would sell spare tonnes of midstream product on the BMX, given the much higher profit margin.

Becoming an integrated producer strengthens the economics of the overall project, relative to just selling spod, as the midstream product will pull some of the profit margin from downstream converters, upstream to the miner "permanently", thus more resilient in the down cycles, therefore sustainable over the long run.

With regards to POSCO, the JV benefits are similar to the midstream production, assuming the JV is paying a reasonable price for the spod that will be feeding the hydroxide plant, otherwise better to produce midstream product only, which may be why the negotiations are taking so long.