Without a doubt AVZ would have a target on its back. Depending on the suitor I think this could come at any time, though more likely before cath deal is finalised.
As they discuss in this series. In my opinion the most likely option is a large mining company. As the hosts suggested the likes of RIO might be looking for a large deposit with a very long life. As compared to the OEMs who don't want to get into mining (but they may have to). I think OEMs will be looking for smaller deposits in safer jurisdictions (unless Chinese). they won't really want a deposit the size of Manono Also, there would be a whole bunch of players in the supply chain that would want Manono. E.g. Catl.
For Manono to be appealing for a US or European based suitor I believe it's only likely if this CATL transaction doesn't go ahead. Due to the inflation reduction act, a certain percentage of the production can be Chinese owned but it has to be a minority. Certainly not let's say 50% Chinese owned hydroxide production, if that's how it ends up going (hypotheticaly speaking). 24% Chinese owned of PLS production seems more reasonable for a US customer. Then there's considerations around a trade agreement between drc and us. All in all it adds to the complexity of a transaction. Whereas I think a Chinese purchaser or larger mining company selling into Chinese partners seems more likely.
A final point to add here is as also discussed in the video I think Chinese supply is under attack by the above concept (inflation reduction act) focusing on shutting down chinese based supply chains. Chinese are most at risk with supply issues. They will look to secure supply in riskier jurisdictions imo.
in summary I think the inflation reduction act will end up positive for an avz transaction if the Catl transaction doesn't go ahead. If it does go ahead then the reduction act may end up being a little bit negative.
all purely speculative and imo
AVZ Price at posting:
78.0¢ Sentiment: Buy Disclosure: Held
