Its looking more likely the bulk of supply will come from OZ due to all the dramas in Chile, and most new projects in Argentina are years away from seeing first production, not to mention the ramp to nameplate. I guess we will see how hard our offtake partners will play soon enough, but dont underestimate the the fact that it is a partnership, in that they need our product and we want to sell it to them, therefore the offtake deals need to economicaly viable for both parties. We can only speculate on pricing atm, but my view is that we find away to go downstream to Hydroxide plant here in Oz, JV with AJM, or something to that effect.
From memory, it takes approx 8.5 tonnes of spod con to make 1 tonne of carbornate or hydroxide. That being correct, cost of 1 tonne of hydroxide would be roughly US$5000 (i.e. 8.5 tonnes of spod con x opex of US$240 pt to mine and US$3,000 to convert). 1 tonne of hydroxide is selling for US$18 to $19k pt atm, thus margin of say US$13,500, or AUD$18,900 pt.
If we established a 60ktpa hydroxide plant with AJM, EBITA would be AUD $1.134 bill (i.e. 60ktpa x $18,900), and if you assumed opex of AUD$700 mill to build the plant, payback would be say 2.5 years, allowing for ramp up and contingencies.
Yep, I know, I'm being greedy, but hey, bloody good numbers for share holders, jobs and Oz economy - win, win, win.
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