Ann: Proposal to acquire Kidman Resources, page-75

In the context of the current carnage that is the oversupplied lithium market, due to the twin perils of a supply side shock combining with demand growth slowing, this thread provides an interesting audit of what supremely dumb decisions even respected executives can make.

(Also a good audit on the flawed thinking on the part of the Koolaid-drunk supporters on this thread of WES decision to go full-bore lithium... along with just about every man and his brother, it turns out.)

Including the purchase consideration for Kidman, WES has spent almost $2bn on what is now proving to be an ill-considered foray into lithium.  For context, $2bn is equivalent to 7$ of WES's Total Assets and 24% of its Shareholder Equity.  So, clearly, a non-trivial amount.

And it has had almost half of that $2bn amount tied up doing nothing for over 5 years, with a weighted average of around 2 idle years on the remainder of the capital.

And when this silly boondoggle was first conceived, FY2023 was slated to be the period in which the first financial return was envisaged.

Well, here we are in FY2025 and the notion of a financial return any time soon looks totally fanciful.  Maybe in 2028 or 2029 the lithium market might find itself in something resembling a balanced state.

From WES's FH2024 interim result presentation: