Finally in bed together. Nothing much else has changed in the story apart from that.
Lots of pretty pictures with no feasibility. SQM will run this thing at whatever speed suits them and eventually KDR will be run into the ground when the real cost of the project is revealed and when the heat comes out of the lithium market, which is just a matter of time as share prices of lithium developer/miners are just driven by speculation (fomo) at the moment, not valuation. The trick for the big lithium producers (downstream guys) is to control the timing of supply to protect their existing margins. You can only do that by putting your foot on top of potential competition. KDR puts out the grand picture of a rosy integrated lithium future in WA, with mine and downstream production, meanwhile in the back offices of SQM the chaps are rubbing their hands together thinking, job done. One hard rock deposit under our control that won't see the light of day until we are ready.
I find it hilarious how these big state owned/state sponsored lithium companies have come and coned ASX investors into raising and putting money into these projects which eventually will only reap benefits for them as they they have a near monopoly status on pricing. Lift the contract prices to get foreign investors to pour money into finding and developing our new supplies and once they've paid for all that drop the contract price and squeeze them out of the assets. Candy from a baby.
With all the supply coming on the market the poultry demand for LCE will be soon swamped. Has anyone bothered to actually calculate the dollar value of the market currently. It's embarrassing small compared to other commodities.
I've coined the phrase baby dinosaurs for all these companies as most will be extinct before they have a chance to grow, stuck dying in the tar pits of falling and manipulated lithium prices, contracting margins, debt burdens and calls by the downstream guys for their pound of flesh.
By the time they come to mine here and at the multitude of competing prospects that are appearing virtually on a daily basis the markets will have corrected and be in bear territory, there will have been blood in the streets and people will have forgotten about the lithium mania.
Take advantage of the current rising share prices IMO, those painting the long term rosy picture just want your money.
Eshmun
KDR Price at posting:
87.0¢ Sentiment: None Disclosure: Not Held
