I think you will find that being part of the refining process at NAL will be tough to have eventuate with our partners.
They had $93m in the bank at the end of last quarter and still some few millions of interest to pay.
If you crunch in the numbers that are being speculated pricewise for Lithium, then i dont even see PLL being able to stump up the $128m CAD for their share of costs in the Carbonate facility, especially for a CY27 start.
GS predicts $800US/t in 2024 $1000US/in 2025 and some $1100US/t in 2026. Even add 25% to those numbers to add a buffer to my next point.
Now im no mathematician, but by the time you pay $800US/t to SYQ for SPOD and 25% production costs, 113,000 times a year over the next 3 years and recieve those prices, that certainly doesnt leave PLL much money to invest in Ewoyaa, fund their share of a $1b dollar hydroxide facility in Tennessee, pay their overheads, finish paying ramp up at NAL and then invest a further $128m in capital to launch the Carbonate facility at NAL.
Not only that, but to only recieve the CARBONATE prices now estimated in 2027 ($17,000-$18000USD/t)
And this would have definitely been realised when our mystery 10-deep M&A team went through NAL last quarter, with a LG rep in tow.
Something has to give. Ewoyaa, Tennessee, NC? NAL?
If you look over at various forums of our JV partner, there are plans and contingency to fund Ewoyaa. There are strategies to bring funding to Tennessee. There is talk of loans. So if loans are utilized then the skint margins are going to be absorbed paying those back too.
But one thing is for certain: there is no talk of loans or contingency to fund $128m Canadian into NAL by the time the items required for NAL retro fit are to be purchased. If you look at the original projection citing the feedstock allocations for Tennessee, then you will see that NAL doesnt even figure in the supply demographic from 2027 onwards. Perhaps todays Lithium prices may have changed that plan entirely.
The only saving grace would be a miraculous recovery of Lithium prices and we know that we ALL cant risk pricing that in to any future strategy. We didnt even risk pricing that into our current studies thankfully, even when the price was hot.
As of today's Lithium predictions over the next 3 years, Carbonate wont be being produced at NAL by 2027 - or if it is, it wont be with the current JV ownership weights.
Perhaps its not POSCO but someone else? And perhaps that someone else DOESNT need KP to middle man
IMO only and all the figures from memory.
Hope you and everyone else had a fantastic Christmas.
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