Ann: ASX Waiver Decision Listing Rule 10.11.3, page-50

.A potential potash threat from old Teslas?
And a ‘competition reminder’ of  BHP’s new Canadian potash play in there too.
https://thewest.com.au/business/min...teries-as-potential-fertiliser-ng-b881546421z

Spoiler : Fertiliser from Recycled Batteries

Lithium Australia tests recycled batteries as potential fertiliser
Sybilla GrossBloomberg
Wednesday, 13 May 2020 9:47AM


Lithium Australia has commited to further larger-scale testing, aimed at evaluating the performance of the extracted metals against commercial fertiliser products. Credit: Lithium Australia

It might seem an unusual ingredient for plant fertiliser, but metal dust from spent household batteries are being tested as potential crop nutrient supplements by a West Perth-based recycler and supplier of battery materials.
After collecting recycled everyday alkaline batteries from local pick-up points around the country and then shredding them, Lithium Australia conducted short-term trials by testing the dust — containing valuable trace element nutrients such as zinc and manganese — on pots of wheat in glasshouses.
The tests, which were carried out at the company’s Envirostream Australia recycling facility in Victoria, showed a “significant uptake” of the metals in wheat on local low-quality soil, according to managing director Adrian Griffin, though it was a slower process in comparison to fertiliser-grade sulphate products.
“We would anticipate that the results would be significantly better than that on more normal soils that we see in the wheat belts in Western Australia,” he said.
With annual sales totalling around 6000 tons nationally, alkaline batteries — used in typical household items — are notoriously under-recycled, according to Lithium Australia, citing research showing that 97 per cent of batteries end up in landfill.
The results have led Lithium Australia to commit to further larger-scale testing, aimed at evaluating the performance of the extracted metals against commercial fertiliser products. Those would likely kick off in the current growing season after the end of the financial year, Mr Griffin said.
“We want to accelerate the trials as rapidly as we can,” he said.
Along with domestic projects, the company was also considering rolling them out off-shore, he said.
The trial mixtures would remain broad at this stage, rather than tailoring them for particular agricultural products and regions.
Secondary industries like scrap metal producers that can re-use batteries don’t have “much of an interest” in spent the alkaline versions — the largest proportion of the facility’s collected batteries recycled at Envirostream, Mr Griffin said. That’s because they had a lower value when compared to their longer-lasting lithium relatives, which are an essential component in electric vehicles, he said.
Still, only 9 per cent of lithium-ion batteries are recycled globally, according to a company presentation, with the domestic rate at less that 3 per cent. It’s estimated that the volume of spent batteries worldwide will grow to 7 million tonnes a year in the next 10 years and the potential value of metal in domestic spent lithium-ion batteries could reach $3 billion a year in the middle of the next decade.
As companies foray into research and development, developers are scrambling to fund mine projects to meet forecast demand for battery metals. Lithium producers alone will need an estimated $32 billion to $37 billion in financing over the next decade to meet demand, BNEF said in a February report.
Large mining companies are also moving into the fertiliser sector, betting that rising food demand and constraints on available farming land will boost the market for the products.
BHP Group will consider next year whether to begin a $8 billion first stage of a potash mine in Canada, while Anglo American Plc in January moved to acquire a UK project aimed at producing crop nutrients.

...Regards the BHP Jansen project, in March Nutrien boss, Chuck Magro ‘poured scorn’ on it,  according to an AFR story that reminds “Nutrien is now by far the biggest player in farm supplies and services,” in Australua

Spoiler : Nutrien scorns BHP new Canadian potash play

https://www.afr. com/companies/mining/potash-giant-pours-scorn-on-bhp-project-20200303-p546ft
Potash giant pours scorn on BHP project
Brad Thompson and Peter Ker
Updated Mar 3, 2020 – 6.22pm, first published at 6.14pm

The boss of Canadian global fertiliser giant Nutrien has savaged BHP's proposed Jansen potash project, describing it as a "sure fire way to destroy shareholder value".

Chuck Magro delivered his most scathing assessment to date of BHP's potash pipe dream while in Australia, where Nutrien is now by far the biggest player in farm supplies and services.

Mr Magro told The Australian Financial Review that any move to build a greenfields potash mine in Saskatchewan amounted to sheer folly.

The call on Jansen shapes as major test of new BHP chief executive Mike Henry's leadership, with noises from BHP prior to his promotion into the chief executive's role last November indicating it had an appetite for the controversial project.

BHP is weighing up spending a further $US5.3 billion ($8.1 billion) to $US5.7 billion on the Jansen potash project and in October committed $US345 million on work to help it make a decision before March 2021.
BHP has already spent close to $US3 billion digging and lining the shafts at Jansen over the past seven years.

Chuck was touring Australia When he poured the scorn,  for a busy week according to farmonline on March 12; https://www.farmonline.com.au/story...bon-management-should-be-rewarded-not-a-cost/

....and although it is not mentioned in the link above, bringing things more directly back to Kalium Lakes, I wonder if his week included taking a look at supporting KLL, already sitting quietly in suspension (since Feb 24)?
Or would BHP have an interest in KLL?

....Wandering further down the BHP rabbit hole;
NB BHP CEO, Mike Henry’s comments at the AFR Business Summit in early March ..
“He (Henry) has signalled that any acquisitions on his watch would likely be small and in early stage projects, which suggests the acquisition of entire companies was very unlikely.”
and those of BHP Chairman, Ken MacKenzie;
“MacKenzie told investors that BHP was ready to seize on the recent market turbulence if it threw up attractive acquisition opportunities.
"What we do know in the company is that value is created at the bottom of the cycle,'' he said.”

Spoiler : See here

https://www.afr. com/companies/mining/market-rout-offers-bhp-a-potash-fast-track-20200311-p5491u
Market rout offers BHP a potash fast-track
Peter KerResources reporter
Mar 16, 2020 – 12.00am

The best-laid plans can get thrown out the window in extraordinary times like these, and a massive rout in the value of Canadian potash exporters is giving new BHP chief executive Mike Henry some extra homework to do.
Henry is scheduled to decide within 11 months whether to spend at least $US5.3 billion on construction of a Canadian potash mine called Jansen, which if approved, would not be selling the potassium-rich fertiliser product until 2026.
It was already shaping as a tough decision given the stark downturn in potash markets over the past year and the regular public sledges from big potash incumbent Nutrien about the supposed risk of Jansen flooding the market with too much supply.
But the decision, and the process of convincing investors, just got more complicated thanks to the coronavirus and the subsequent market rout,which has smashed the valuations of Nutrien and Canada's other big potash exporter Mosaic.
Mosaic is the smaller and more indebted of the two potash exporters, and has lost 50 per cent of its value in the past two months and 62 per cent over the past year.
Mosaic's market capitalisation stood at just $US4.17 billion at the close of trading on Friday, as investors fretted about the company's ability to service debt if a downturn in potash prices were to persist longer than expected.

Even if a takeover premium were added, BHP could buy Mosaic and its 10.5 million tonnes of annual potash capacity for less than the $US5.3 billion to $US5.7 billion cost of building Jansen.
Such a move would see BHP skip the six-year wait for Jansen to start producing, and also soothe the concerns of anyone who is listening to Nutrien boss Chuck Magro's rhetoric about Jansen flooding the market with too much potash.

More on Magro's claims later.
But first let's be clear; launching a takeover for Mosaic would be completely at odds with the consistent messages Henry has been sending to investors, analysts and media during his global roadshow over the past month.
Henry has been telling investors that he remains scarred by the destructive acquisitions that gave the big miners a bad name a decade ago.

He has signalled that any acquisitions on his watch would likely be small and in early stage projects, which suggests the acquisition of entire companies was very unlikely.
He also named copper and nickel as the areas in which BHP was most keen to grow; a potash acquisition has not been remotely hinted at.

Buying Mosaic would be messy, as BHP found out in 2010 when it launched an unsuccessful $US40 billion bid for Potash Corporation of Saskatchewan; the company now known as Nutrien.

That bid failed when it was knocked back by the Canadian government on national interest grounds, and buying Mosaic may come with all those same challenges.

Any bid would also risk being viewed as opportunistic by Mosaic shareholders given the current market turmoil.
But BHP is in the mood to be opportunistic, as chairman Ken MacKenzie made clear at The Australian Financial Review Business Summit in Sydney last week.

MacKenzie told investors that BHP was ready to seize on the recent market turbulence if it threw up attractive acquisition opportunities.
"What we do know in the company is that value is created at the bottom of the cycle,'' he said.
"We have engineered the business so that if the bottom of the cycle goes on for multiple years that we still have a business not only capable of surviving but actually of thriving actively.
"I'm not sure if there will be any opportunities that come from this, but if there are we're actually in a position to act."
BHP's spending commitments also appear to be changing fast amid the collapse in oil and gas prices.
Until recently, Henry's first big spending item was expected to be a $US2.85 billion investment in the Scarborough LNG joint venture in June.
A decision on Scarborough now appears likely to be delayed because of the oil price slump, meaning BHP might have extra spare cash lying around these next couple of years.

Shaw and Partners analyst Peter O'Connor said the events of the past two months had made acquisitions more attractive.
"There are times when it is better to build than buy, and vice versa,'' he said.
''Right now we are clearly in a value market."
Despite that, O'Connor says a decision in February 2021 to spend about $US5.3 billion building Jansen remains the most likely outcome.
"I can see the logic of potash and I think Mike Henry will go ahead with Jansen," he said.
O'Connor likens Nutrien's warnings about Jansen flooding potash markets to the dismissive attitude BHP and Rio Tinto took towards Fortescue Metals Group before its emergence as an iron ore exporter in 2008.
''Never believe an incumbent," he said.
The irony of Magro's public bluster over Jansen is that he and BHP are actually aligned on their views for potash demand growth.

Both believe demand for potash will rise from the current levels of about 67 million tonnes per year at a rate of about 2.5 per cent per year between now and 2030.
Such a growth rate would mean global potash demand would be almost 86 million tonnes in 2030; meaning an extra 18 million tonnes of supply would be needed by 2030.

If approved next year, Jansen won't be selling potash until 2026, and won't produce at its full capacity of 4.5 million tonnes until 2028.
Magro says Nutrien has 6 million tonnes per year of potash capacity that is currently shuttered and could be brought back online immediately if markets warranted it.
He says debottlenecking at his mines could release a further 5 million tonnes of annual capacity at a lower cost than BHP could build Jansen.

But that latent capacity still leaves 7 million tonnes of potash demand for BHP to fight for.
BHP's bigger scale, stronger balance sheet and its diversified business model mean it would likely prevail if Jansen's arrival in the market triggered a stand-off with Nutrien, Mosaic and other producers like K&S.
''I can see why Nutrien and Mosaic are saying what they are saying, BHP is a serious new player with a balance sheet that can withstand some knocks for a while if that is required,'' said O'Connor.

Could there be a simpler, more mutually beneficial way for BHP and Nutrien to share the potash pie?
You don't have to stare at the map of Saskatchewan for long to realise why Nutrien's Lanigan potash mine would be a very nice fit for BHP.
The mine is entirely surrounded by BHP acreage, and it is next door to Jansen.
Simply put, Lanigan is the hole in BHP's Saskatchewan doughnut.
Asked whether Nutrien might consider a joint venture with BHP on an existing potash mines in Saskatchewan, Magro indicated he would not rule it out.
"I think we would always be willing to have a conversation about what would create value,'' he told The Australian Financial Review earlier this month.

But he also made it clear that Nutrien had little motivation to pursue such a partnership.
'''Our potash business is the crown jewel of the company ... I don't think we would think there is any reason to have a partner in a business we have dominated for so long,'' he said.
''We are not financially in a position where we need the money".

Importantly the  story above notes;
“Both believe demand for potash will rise from the current levels of about 67 million tonnes per year at a rate of about 2.5 per cent per year between now and 2030.
Such a growth rate would mean global potash demand would be almost 86 million tonnes in 2030; meaning an extra 18 million tonnes of supply would be needed by 2030...”

And that, for BHP, a potash acquisition has not even been remotely hinted at .

Still, for me it’s food for thought.
If there is true value in KLL,  especially with an expanded resource, this cap raise offers a mighty opportunity for the large incumbents to profit in a ‘value market’?

.....especially if that  expanded resource has significantly more than the 90,000 tpa that K+S has dibs on?

cheers