Ann: New Offtake Agreement, page-225

Tianyi contract

If you go back to the March quarterly 2020, in it they talk about having exported 20,000 tonnes of 6% grade spodumene to Yibin (Tianyi). The link by SF@HC suggests that 70 tonnes of lithium hydroxide monohydrate is produced in the now, with more than 3,000 tonnes sold to date. At full ramp up that would make it 25,550 tpa of hydroxide.

By way of conversion you need 6.5 tonnes of 6% grade spodumene to produce 1 tonne (56.5%) lithium hydroxide monohydrate at a 90% recovery rate. Which is 19,500 tonnes of 6% grade spodumene, which probably covers the 20,000 tonnes spodumene initially exported by PLS in March, to produce the 3,000 tonnes Yibin has sold to date.

I presume somewhere along the line PLS exported another 20,000 to keep Yibin's need, but that information is hard to find.

By way of finalising my comments, at 25,550 tpa of hydroxide equates to a 6% grade spodumene need of 166,000, which from recollection if recovery rates are achieved in the 2016 DFS for the 2mtpa feedstock plant, or about 50% of stage 1 production. If I recall correctly the contract with PLS is actually for 75,000 tpa with Yibin, or about 24% of the 2mtpa facility output assuming DFS specs met, but noting recovery rates are still below that DFS target, which still means that Yibin will need to find more supply elsewhere if it is producing 70 tonnes of lithium hydroxide monohydrate per day. The maths around Yibin's needs is here - Post #: 42346193 - which I then posted when I posted previously in PLS on this thread - Post #: 43765602

PLS capacity - spare

In terms of your questions too me , data is scant, and I suggest my earlier post on this thread is the one that contains my views. I suspect, and given what you saw with AJM, there is spare capacity in the system because end customers, i.e. probably Chinese customers, have not honoured contracts, or those contracts expired - see below - thus leading to that spare capacity and/or that spare capacity was available in part.

Looking at some of the Anns:
1. Ganfeng is stated to be entitled to 160,000 tpa of 6% grade spodumene (Post #: 24400002). This relates to the existing Stage 1 2 mpa
2. Great Wall reported binding is in regard to Stage 2 - the expansion of an additional 2mtpa facility. It doesn'tappear it has signed for Stage 1.
3. Posco reported binding is also in relation to Stage 2, but could be spill over effects to Stage 1 if its 'option' to increase purchases cannot be fully accounted for by Stage 2 IMO IMO. But again, it seems to me the trigger point for teh contract is stage 2 getting intoproduction..

The Sept 2016 PFS forecast 314,000 tpa of 6% grade spodumene for Stage 1, driven in part by a recovery rate of 77.5% from the 2mtpa operation. So in effect Ganfengs agreement is for about 51% of Stage 1 capacity if Stage 1 recovery rate was achieved, which means it is probably more (given PLS has yet to achieve Stage 1 DFS targets, but recovery is improving).

A few of PLS's quarterlies talk about Asian customers (note the plural) without these othe buyers been specified. Given I haven'y found other long term contracts for Stage 1 (do posters here know of others??? so treat what I am saying below with utter caution) this would suggest too me those customers are probably on short term contracts or buying spot in regard to Stage 1. Someone please correct me because what I am saying is when PLS went into production only half its production was actually secured under a long term contract for Stage 1 - you can read into this what you like around whether more production should have been locked up under long term contract? So were there other long term contracts signed???

Now with Yibin coming into some form of binding contract at 75,000 tpa in March 2020, it seems what it has done is ineffect replaced some of the existing short term/spot sales under Stage 1 under this hypothesis which to repeat is IMO IMO IMO Again someone please correct me, but in effect if I have read it correctly it would appear too me who stopped buying were those customers utilising Stage 1 buys on the spot/short term sales, but unclear what Ganfeng has done. which opened up the opportunity for the Tianyi contract..

Which takes me to Stage 2. Reading the Great Wall and Posco binding agreements for Stage 2, which in effect lock in a lot of that facilities production under long term contracts with spill over effects into Stage 1 as well, well it seems too me the delay in that expansion is really what has impacted PLS as well, as well as obviously price falls and been unable to achieve DFS assumed Stage 1 recovery rates quickly.

And hence IMO its move into AJM - it had a poor timeline to those two Stage 2 binding contracts and therefor needed to buy existing capacity to facilitate Stage 2 contracts IMO IMO IMO. That is my speculation and is posted in total IMO IMO IMO. Posters to question, add, verify this post need to go back and have a look at the Great Wall, Posco and Ganfeng contracts signed in 2017 and 2018. If I have read the 'history correctly' in relation to contracts, this post probably reduces my initial comment that all PLS's Stage 1 production was locked up under long term contracts - it seems Tianyi was courted by PLS when its spot and short term contracts, and customers therein stopped buying IMO IMO IMO.

I guess with AJM's production been taken over by PLS, and therefore all AJM's existing contracts become null and void, in effect the takeover of AJM may trigger the Stage 2 contracts - i.e. I note teh term May, but my reading of the contracts suggests that the TO of AJM possibly triggers the contracts with Posco and Great Wall coming into being. Do posters agree with this comment or not?

On a seperate issue, I guess we will find out by next week whether Yibin has become a customer of AVZ or is it someone else, but that is for another thread.

All IMO and pure speculation. Anyway, that is how i am readin the contracts now, but probably doesn't help rainbow. Anyway, I won't post on this thread again and was confused why I was been tagged, but it did tweak my interest only in relation to what may or may not happen in that African play and whetehr Tianyi might be a customer there.

All IMO IMO IMO IMO