Tobyjack may have got herself confused with the term "spherical graphite", which actually has two different forms - coated and uncoated. It's important to know the difference, and not to mix up the two, especially if you are talking about pricing and profitability. Production costs at Balama will almost certainly be the world's lowest, and the volumes planned for the spherical graphite plant are large enough to ensure this cost advantage is maintained.
As the SYR announcements made clear, uncoated spherical graphite currently sells for about $US3500 per tonne, whereas coated spherical graphite is worth something like $7000 per tonne, which is apparently where Tobyjack got confused (TJ's own reference, which she quoted, but maybe didn't read, quoted a price of $6000 to $10000 per tonne, which should have been a warning).
The assumption that a plant located in the US would be shipping most, or all, of its product to Japan or Korea looks weak. Far more likely that the output is planned for the North American market, in areas that we do not know about yet. Obviously, the study now under way will have that front-and-centre in their analysis of the proposal.
Shipping costs to markets are interesting. Tobyjack claims they will be $US400 per tonne. I'm in Japan right now, so can't check, but I think Credit Suisse estimated an average of $150 per tonne for shipment to China, US, and Europe. Container shipping costs are notoriously difficult to generalise about, because they are so dependent on the volume of containers going in each direction at the port of origin. Only the DFS will be able to resolve that one, and tell us if TJ is right, or I am right, or we are both wrong (which is probably the most likely). The strong implication in the announcement of the Chalieco contract, that there will be other announcements in the not-too-distant future, could also mean some clarification in this area.
I'm not too fussed. SYR management have steadily and purposefully covered all the bases so far, and I see no reason to expect that the question of efficient and economic transport will prove any more than another step along the path to successfully marketing the full planned range of graphite products.
Cheers,
Prime1
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