Ann: Pilbara Minerals launches digital sales platform, page-81

Hi sabine.

This digital sales and trading platform does seem to be a very innovative way to do business.
PLS currently has offtake agreements that have guaranteed payments which underpin their business.
The auction of battery materials, I think, has been put in place at an opportune time as demand is rising and supply is tightening.
This is a situation that favours the process of confidential purchasing through an auction process.
Auctions work well when assets are in demand and there is a number of people interested in purchasing.
Think of the current housing market with auctions achieving well above reserve prices or shall we say Southbys/Christie’s with collectibles, achieving record prices.
With the currentt market demand, there is no urgency on the seller to sell at a discount and if the reserve is not met then the seller holds onto the asset.
A very positive situation to be in, IMO.
To balance this though, I don’t think the process would function as well if there were a supply glut.
Take advantage of the current situation.
The board and management have acted wisely and should be commended with the AJM purchase and now the auction to leverage up the growing lithium demand from manufacturers.
Better to be price makers, not price takers.
Iron ore majors executed favourable changes a number of years back by moving to spot prices instead of negotiated contracts.
It will be interesting to see how this unfolds, hopefully in a positive way for PLS and potentially other miners.

T.