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Roller62

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20/07/19

17:02

Post #: 39614359
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Originally posted by Scarpa: ↑

If you look at a hydroxide plant the biggest input cost is the spodumene costs itself and energy, not labour. Lets start with the spodumene cost, well if you own the mine you save on buying spodumene, but going to Tianqi for example well they would also be saving on transport costs as transport costs will be less for exporting hydroxide than spodumene for them as before they were getting their spodumene from their JV share of Greenbushes and converting it to hydroxide in China (given it takes 6.5 tonnes of 6% grade spodumene to produce 1 tonne lithium hydroxide monohydrate and 11 tonnes if just producing lithium hydroxide).

Energy costs are less in WA than China btw if you look at the domesic gas price compared to what China buys LNG from WA at. Not shore what is the actual energy price in China for hydroxide producers.

The other large cost is the capex cost btw, so all in all, my view is that for spodumene producers that are capital/cash rich and have access to cheap energy then making hydroxide is the way to go for them. Obviously getting access to technical staff to help is the key as well, but IMO producing hydroxide is a more capital intensive process than labour intensive (even more so than mining spodumene and converting it to 6% grade spodumene).

In terms of the impact on price, or vice versa whether lower cost operations will shut down existing hydroxide producers, well just be mindful that Greenbushes cannot supply the whole market so demand/supply will always determine price and the higher the hydroxide price well the more profit Tianqi and Albermale will make by producing hydroxide in WA than China IMO (noting that for end battery buyers not producing batteries in China means there is also the advantage of not having a VAT tax from China as per my previous post).

All IMO IMO

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Thanks for the informative post. You mentioned using gas for the hydroxide plant, I assume electricity could be used as an alternative.

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Running discussion on SP, page-21411

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