Ann: Drilling at Tabba Tabba Finds High Potential Pegmatites, page-60

Try it ... miners getting $1,000/t and refiners getting what ... $12,000/t and change nothing else

Miner cost remains $600x7 = $4,200 and Miner Price is $1,000 x 7 = $7,000 for a Miner Margin of $2,800/$7,000 = Refiner margin is 40%

Refiner cost now ($1,000x7 (SC) + $10,000 ) = $17,000 and Refiner Price of $12,000 and you have -ve margin and go out of business at spot pricing.

(However if you bought at SC at low spot and sold salts under long term contract then the refiner is the winner .... but that was not your question)

Now maybe Refiner processing costs are not $10,000 ... maybe in China its only $5,000 ... now they just breakeven. You can play with these costs, collect all kinds of data from posted results, look at all the DFSs and so on, you could go deeper and look at the true AISC and get a deeper and broader understanding, but you'll end up realizing that the margins are lower in refining than in mining


The point of my post is that margins are not bigger in refining as Kevo88 would led you to believe. It is not as "easy" as that. Again I would point to Paul Graves' interview to gain a better understanding of the long term contracts needed.

Also none other than Ken Brisden refutes Elon Musk on margins in refining. Ken was asked the following:

“… but you said mining’s the hardest. Elon Musk is saying refining was the hardest and that's where the margin is. So, you are outwardly disagreeing with Elon Musk".

"(KB) Yeah, I'd love to know who's advising Elon because I couldn't disagree more, basically, with the position that he's taken. Refining capacity is not an issue globally. Sure, there's a concentration of refining capacity in China today, but I'm equally optimistic that that capacity is going to be built out elsewhere around the world, and bear in mind, to build chemical capacity - realistically something like 18 months to 24 months, but a mine is measured virtually in decades as to the delivery of its capacity and that mismatch cannot be solved in short order. I feel like he's either a genius talking his own book because he wants us all to believe that there is excess raw material, or in fact he's been poorly advised, because I just cannot agree with that thesis."

Ergo, I disagree with Kevo's post. He is entitled to his opinion of course, as we all are, but it doesn't have any broad support it seems (other than here on HC).