DC's talk was excellent.
My key takeaway message was the remarks regarding the dominance of China and the serious risk of supply disruptions for Western automakers. The west would be crippled by this. IMO, you just have a look at what China did to Japan on Rare Earths in 2011. DC alluded to a 'Rare Earths situation' and that there are only two possible outcomes:
- either we return to the 'equilibrium state' of higher graphic prices from two years ago, or
- there is a policy move to an ex-China price.
Since a robust motoring industry is absolutely essential to the global economy of western companies, there is no other option. From the standpoint of investors, supporting Australian businesses until they are operational, such as what has happened to Lynas with rare earths, creates an alternative supply and ultimately will resolve issues and build a more resilient global supply-chain. Therefore, this is a more likely outcome for the growing graphite demand that we are on the cusp of.
Furthermore, I thought DC's remarks that Australia thrives on solving engineering problems was great. As we do! We may not be able to compete on low-wages but we make up for it with engineering solutions and techniques that are cost-efficient and of a more higher standard than others. That's why the Early Contractor Involvement could be a serious SP driver and may prove to be a masterstroke when FID occurs.
With limited companies who are advanced enough with regulatory approvals that are shovel-ready RNU is sitting poised. At these low-levels, it's a great place to be parked and accumulating.
AIMO, DYOR GLTA(patient)H
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