Winsome gets another break go their way.Arcadium had its...

Winsome gets another break go their way.

Arcadium had its quarterly conference call this morning and its ex-investment banker boss gave notice that they have put a halt on development of their Galaxy spodumene project (used to be called the James Bay project) in Quebec. He did go on to to say that they might re-evaluate that decision if another party wanted to provide funding for it but the impression I got was they'd rather put the project into hibernation until the markets turn. Galaxy was supposed to produce about 321k t pa of concentrate so that is now 321k t pa that will not be available to the likes of POSCO and EcoPro.

I take that news as unmitigated good news for Winsome seeing it is currently in the hunt for a strategic looking for some upstream action in Quebec.

So in front of Adina in the Quebec development pipeline is Critical Elements Rose project and Arcadium's Whabouchi project and there is also of course Sayona's NAL project that is already operating (they've recently employed the bloke who turned Adini's Carmichael coal project around so I'm not writing them off yet).

Rose is fully permitted and is set to produce 200k t pa of concentrate but to be honest Critical Elements seems to treat it as a weekend hobby and any progress in recent years has been glacial.

Whabouchi is effectively 50% owned by Arcadium with the balance owned by the Quebec government's Investissement Québec. From memory the production is set to be 215k t pa with the concentrate going down to a joint owned hydroxide facility at Becancour. The upstream development site went bust during the last lithium price crash and it apparently is currently under development but I don't when it is expected to go into production. I'm not sure whether Arcadium has lined up an offtaker for its Whabouchi hydroxide but note that POSCO is happy to develop its own hydroxide plant in Korea in partnership with Pilbara so they might prefer to do that again, for their Quebec operations.

A decade ago Arcadium (then called Livent) was the dominant global producer of high quality lithium product but due to a mix of timidity and incompetence sat on their hands while various Chinese operators caught up then ran over the top of them. Now, once again Arcadium seems to be taking a relatively conservative approach as they ride out another lithium price crash. In my view with the Renard option Winsome has a real chance of taking advantage of the opening provided by Arcadium. That is if they can get one of the Korean strategic on board and can get the various governments to expedite and subsidise the construction of the Route 167 extension.

Happy for seaemay, dtab and co to kick the tyres on this idea. I think it stacks up as being at least plausible but please shoot it down if needs be.