One more thing to add here is that neither of us are currently using anything but spodumene production in our assumptions. Once chemical production kicks in this easily scales up to over $14 Billion without adding any unknowns.
I will also note that I think there will be a fairly serious bidding war going on outside of our view at the moment. GM, VW, Tesla, Stelantis and Ford all will need more product than all of what is available in North America, so whoever does not secure their needs inside of North America will be at a distinct disadvantage and could forever change the face of the auto industry in the US. So is it out of the question for one of the big 3 to offer us a deal that includes sweeteners like up front money for our Hydroxide plant completion, or and added premium to ensure they secure the least carbon footprint? No, I reckon this will be pennies to them vs having an unsecured future.
I have mentioned this before, but with so many new people it is worth mentioning again. The new trade agreement between the US, Mexico and Canada (USMCA) requires that 75% of an automobile must be manufactured in North America.
With the overall reduction in car parts by 2000 parts this will inevitably cause some auto manufactures to re-onshore parts that they had traditionally gotten from elsewhere.
concerns on how to obtain these locally, they would need to break the reaming parts down into three buckets.
1. Easy to find in N America
- Easy and cheap
- Easy and expensive
2. Difficult to find in N America (like micro-chips)
3. Not available in N America (like airbags)
My suspicion is that #2 and #3 will be a fairly large numbers which will start causing more delays, and remember what is available today may be in short supply or not available once everyone starts to source this way.
My point in this is that auto mfg will truly want to secure their lithium supply and battery supply from N America so they are not faced with on-shoring another part that may be either in short supply or not currently available at all, or will add a lot of extra cost.
Right now you would have to say Lithium, and Lithium chemicals would be difficult to find in N America and cathodes would be Not available at all. Blocking your competitor by sucking up what is available and forcing them to look elsewhere is definitely going to be in their strategic play book. Forcing your competitor to offshore battery production and onshore something that is more expensive just makes sense.
Sayona / Piedmont must be sitting back smiling.
(20min delay)