@PirataCzornomaz I don't think anyone knows and that includes those inside E25. The pieces of the puzzle are there but whether they fit together to include E25 is still to be confirmed. North America wants (needs) non-Chinese HPMSM supply lines. E25 has a project that supplies HPMSM non-Chinese supply lines.
The difficulty is that this is basically a new industry for the US. There isn't a significant existing supplier that can expand. There's several potential stumbling blocks:
- Will the OEMs and Battery makers have sufficient confidence in E25's ability to execute to back them?
- Will the OEMs and Battery makers accept the price E25 notes will be required for project viability because it is higher than current Chinese prices. In the future it seems increasingly likely that HPMSM may have a different price points depending on where its produced and its carbon production profile.
- Can finance on suitable terms be agreed?
- Will someone else come along with a cheaper/better IRA compliant HPMSM solution that can scale to the volumes required. From what I've read of competing projects, E25 ranks well. The biggest threat here would be it being politically acceptable for someone like CATL to set up US based conversion plants.
- The US treasury undertake a U-turn in their regulations around foreign country of concern interpretations (with regulations expected soon, that should clarify this risk).
Its still a little unclear whether foreign country of concern conditions extend to ownership structures. Its fairly clearly mining Manganese ore in China or shipping ore to China for processing won't be acceptable. What's less clear is Chinese companies setting up plants on US soil or in US free trade countries.
It would appear the product quality is acceptable so that shouldn't be a problem.
There's flexibility around where the site is located so unless someone has monumentally stuffed up, permitting shouldn't be an issue.
Yesterday there was evidence that battery makers like LG Energy are prepared to back juniors in the battery metals space to get North American product. LG Energy announced a 25% offtake deal with GT1 and invested A$20m into GT1, surprisingly at a significant premium to the current and historical Weighted average price. GT1 has a very impressive board, but they are a still only an ASX listed, Canadian lithium explorer with no existing production and only a small resource. Their PEA (scoping study) is due in the next couple of weeks but they don't yet have a full feasibility study. There is obviously no FID and they don't forecast to be into production until 2025. At Friday's closing market cap of A$171m (per ASX) GT1 is only marginally larger than E25. Where companies like LG Energy have confidence in the management team and directors they appear prepared to take a punt on Juniors to source the product they need. Was this confidence in the board a factor in E25 adding Rudolph Van Jaarsveld to the Board of E25?
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