The great energy switch is on.
I’ve just listened to Rio & LTM’s phone-call presentation. The energy-transition is officially underway now that both companies’ boards have agreed to acquire LTM in unanimity.
Rio believe that LTM's lithium is the right low-cost product and, now is the right time to buy at this low-end cycle. More importantly though, because of the cash and capital Rio has, they believe that they are able to expedite LTM projects and the delivery of their products 'two years' earlier than LTM’s board had planned now that they have full resources available to it. By bringing an economy-of-scale to the battery business which they hope will unlock significant value for their shareholders in the coming years for decades.
IMO, this is a wake up call to all other multinationals looking to secure global-scale low-cost projects. As far as graphite is concerned, what we know is that there can be no complete battery without the anode side of the equation.
Rio Tinto already has a foot on RNU tenure. I’m not suggestion that because we have a relationship with them that a possible M&A is on the cards; rather, I'm saying that there is obvious interest in South Australian resources to provide supply security, which could raise red flags for other multinationals who may be playing a waiting game.
FOMO is with the multinationals!
ALL IMO, DYOR, GLTA(Patient)H
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