They could have taken the standard route AND brought in the experts from the start, which might have led to an operational 12 ktpa plant by now. It's not inevitable that a larger plant would have failed—there’s a real-world example to prove it. LAAC/Gangfeng went big with a 40 ktpa plant right from the start, and surprise, it’s working and cash-flow positive (currently running at 70% capacity). They were building at the same time as AGY but had the scale and expertise to do it right. Instead of "measure twice, cut once", AGY have taken the "measure once, cut thrice" approach. So now when lithium prices recover, LAAC will be cashing in while AGY will still be sorting out their engineering plans.
The real mistake was betting everything on Pablo and making him the Jesus Nut of the operation—looking back, that was a terrible decision that ended up costing around $70 million. And just because they’re aware of some issues doesn’t mean they won’t f*ck up the 12 ktpa expansion too, even if the risk is lower now that they’ve finally brought in some actual experts. Keep in mind, they supposedly learned lessons from the 500 ktpa Stage 1 plant, only to later f*ck up the Stage 2 plant. So, there's no guarantee they really know all the problems—they just know some of them.
AGY Price at posting:
3.7¢ Sentiment: None Disclosure: Not Held
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