I would like management to at least discuss the possibility of building a midstream refining plant. Li2SO4 and Li3PO4 immediately come to mind.
The beauty of such a plant is that instead of shipping a product with 5.5% Li content, we'd be shipping a product with approximately 35% Li content. This means that a significant chunk of waste product can be left at the site in the tailings pit, instead of being shipped to China. It would drastically reduce transportation costs (you're shipping about 1/6 as much product for the same Li content, and revenue) and it's hugely ESG-friendly, since reducing the tonnage you're shipping by roughly 84% means significantly less shipping. As a final benefit, you can run the fines through the refining process (for either Sulfate or Phosphate production), so instead of accepting 10% of concentrate price for the fines, they would be just as valuable as the bulk ore.
The two main midstream refining products are Li2SO4 and Li3PO4, but Alkemy is already building a rather large Li2SO4 plant (to serve a LiOH refinery in the UK) that will produce 20,000 mt/annum, with the intent to ramp-up to 100.000 mt/annum of production. The only Li3PO4 plant I am aware of in Oz is the 3,000 mt/annum test refinery PLS is building as part of their Calix JV. Not only is it a much smaller competitor (for now; if it works, I'd expect PLS to build a much larger plant), but whereas Europe and North America are fixated on LiOH only, China, our natural client, manufactures a significant fraction of their batteries as Lithium Iron Phosphate batteries, so a Li3PO4 plant makes more sense for an Aussie firm shipping to China.
Unlike a LiOH plant, which is extremely complicated, requires massive CAPEX (think roughly AU$2B for a 100,000 mt/annum plant) and takes 4 to 5 years to construct, the two midstream refinery plant options can be built in less than two years for AU$150M to AU$200M (the Pilabara test refinery is slated to cost AU$100M). With AU$400M in the bank, and our current revenue stream, we can afford our drilling programs, developing BP33 AND building a midstream refining plant.
After all the recent bad news, it'd be nice if management would communicate some good news. News about production and load shipping details and an update about the BP33 resource are expected. It'd be nice to hear that they are looking at additional ways to add value for shareholders, and something like a midstream refinery would be brilliant.
Just my opinion. DYOR, and have a nice day.
Expand
(20min delay)