ASX Today, page-31243

It's interesting that the agreement between MIN and ALB is nowcancelled and they went back on their decisions. Actually it’s MIN that wantedto keep 50% of Wodgina project instead of having 40% of it and given up having40% of ALB’s Kemerton lith. Hyd refinery plant. It was also going to have somestake in ALB’s two refinery plant in China. MIN has now given up all these andwill keep more shares in Wodgina spod plant.

That also shows that owning the spod ismore important than owning a refinery, because a refinery wouldn’t work withoutthe spod feedstock. This is a very critical point in lithium supply chain now.

Also there is misunderstanding thatbuilding a refinery is harder to build a lithium mine. That’s 100% wrong. Refinery is only dearer to build. Thereis no hardness in building a refinery as long as you have the money to buildit. You can build it in anywhere you want and just in two years. But a spodmine is not like that. Much harder and takes much longer to build. Anyway,..that is not our topic now.

I was surprised before when Chris Ellison couldn’t convince ALB for a refinery plant inPilbara and had to accept making JV for ALB’s refineries in China becausehe was insisting to build them here in Australia (he was asking for Gov. helpand LTR was supporting him I guess). Now he corrected his decision.

The JV agreement has been reset now and they both went back which has beena costly time wasting period for both.

As MIN will keep the 50% (it was originally 50% 3 years ago, then ALBtook another 10% 2 years ago and reached to 60%), that will make ALB short in spodumenefor its 2 refineries in China.

ALB now has 49% of Greenbushes and 50% of Wodgina. It’s for sure thatthe Wodgina spod will be sent to ALB refineries in China. It’s not wise to sentthe spod from Wodgina to Kemerton because of a few reasons;

1. Kemerton is too far to Wodgina. The spod can’t be shipped by road transport, it has to be shipped by sea transport but it’s not worth it. Instead they can send it to China by vessel.
2. The low grade and high iron content characteristic of Wodgina spodumene is not suitable for refinery process in Kemerton as the refinery is already fine tuned for high grade and low impurity content of Greenbushes spod (which is similar to LTR’s KV spod).

So, Kemerton plant can only accept spod from Greenbushes.

ALB will probably be short for spod for its 2 Chinese refinery plants too.

Let’s not forget only Kemerton refinery plant needs a lot of spodbecause it has 2 trains and 2 trains more will be built and it will have4 trains (over 100kt Lith. hyd).

This problem will be a hard one to be solved by ALB indeed.

In regards to what MIN will do, as you can see on MIN’s anns above,MIN will make the decision of refinery project until the end of this year aftertheir preliminary study finalized.

Btw, LTR is making its DFS but not preliminary study for its refineryproject. So LTR is much ahead of MIN atm.

Some think that MIN might make a JV with LTR for the refinery. I don’tthink LTR would do a JV with MIN. TG wouldn’t do that because MIN has noexperience on building and operating a refinery plant, while that’s LTR’sexpectation from the JV partner. It was said many times by TO on presos.

In regards to ALB might make another bid for LTR; I don’t think theycan do it. They are too late because the price for an offer should be now even dearer than $6 pershare (or $13b mcap).

I think an offer around $7 ($15b mcap) would be attractive for LTRholders. As PLS’s mcap is around $15b atm, that would be the min price for LTR.As they can’t go and buy out PLS at $15b now, they wouldn’t be able to buy LTRany less than that either. Maybe $15b or $7 ps would be accepted.

So I don’t think ALB would be able to pay $15b without a lot of debt.

I also think that BVS Group (Blackrock-Vanguard-SS) would not supportthat takeover either. They already have 20% of ALB. Instead of putting ALB in moredebt, they’d prefer to buy more shares in LTR and increase their stake. Thatwould be what I’d do if I was managing BVR group.

It’s all good for us in any case.

In regards to lithium prices; I’m watching everything even though I’m silent on HC.

I’m watching the EV sales very closely. Waiting for the first halfglobal EV sales reports.

The EV sales are going unbelievably good according to BYD’s first halfsales in China. It’s above 45%. Also we got the news that the EV sales growthrate in the US for the H1 is 48% which is above my global growth rate of 45%.

I’m focused on the growth rate of EV sales and lithium production. Asyou may remember my recent post (Post#: 68249837) whichI was analyzing these topics (this post was very important actually), myprediction is all forecast saying 35% growth rate in EV sales in 2023 will bewrong, it will be more than 45% and there will be a huge lithium deficit innext 3-4 years and it be worst after that. I explained that in my post.

This deficit will amaze the world I think. And the lithium price willgo near to last year peaks again because there is no 45% growth rate inproduction. It’s so simple.

Also the forecast about reaching 50% EV sales of all car salesincluding ICE on 2030 is also going to be wrong.

Reaching 50% forecast was said to be in 2040 when it was firstannounced 4 years ago. They it was pulled back to 2030 last year. 10 Years down!

Now I think 50% will happen in latest 2028 if not 2027. I made a lot ofcalculations and this is the decision I have made. If there could be no deficitin lithium supply and demand it’d be 2027 I guess.

Just think this way; the whole passenger car sales are around 80-90m.say 90m. We are talking about half of this which 45m.

In 2030, 7 years later from today, how could you find 45m stupid buyerswho would be happy to buy an ICE car? Even in 2028, no one would be happy tobuy an ICE car.

How would you think about it. Just imagine yourself in 2028 andthink that you would have to buy a car. What would you buy?

Because today, according to my research every upper and middle classbuyers are only buying EVs. The ratio is nearly 80%. The only hurdle is no EVsare immediately available to buy. And that buying force will be spreading downto other lower income segments of people over the next 5 years and we willeasily reach to 50% ratio in 2028.

I made spreadsheet calculations according to growth rate of EV and thelithium demand is going to be mind blowing.

The Wood MacKenzie analysis which is taken as base by LTR (seethe below page of LTR’s anns) and Aust Gov Dprt. Reports is going to bewrong as it was showing the deficit was declining in 2024, 2025 and 2026. Itwill be widened instead.