Ann: Rincon 2,000tpa Li2CO3 Operations Update, page-116

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02/07/22

23:08

Post #: 62338981
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Originally posted by Sdaji: ↑

I agree that some nasty economic times are probably coming. I'm old enough to have lived through economic recession.

This is one of the reasons I'm in AGY. I've posted about this for quite a while and recently I've been seeing a few others posting about lithium being recession proof for the next few years. As we've said, even if total new vehicle sales drop drastically, EV sales will increase dramatically and for years supply will not meet demand... even in recession conditions.

This is great for us, but it gets better. Economic recession does not last forever. Years down the track when we are no longer in recession, the economic expansion will see people having more money and want to finally get that EV they've been dreaming of. The timing is perfect; once we are past the first 20-40% of new car sales being EVs, the economy will be recovering allowing more people to afford them. Also, don't forget that many middle class people never buy new cars anyway; even if they can comfortably afford it they know that buying second hand is better value in practical terms. However you slice it, the percentage of new vehicles being EVs is going to continue to go up completely regardless of economic conditions (even if the economy was to do something so unthinkable that new car sales by more than 50%, the proportion of EVs would increase) and for the next few years even a 50% reduction in total new vehicle sales would not stop the total number of new EV sales increasing.

But... it gets even better. An economic recession will depress new lithium production. It takes a few years to get from scratch to lithium production, and if we're in recession for the next few years, lithium production is going to be retarded until a few years *after that*. It won't completely stop new production projects entirely of course, but less investment money available for new projects and development will decrease supply and increase prices above what they otherwise would have been.

We just snuck through with the timing, we'll be bringing in profits at the perfect time, allowing us to expand while others struggle to get off the ground.

...and if they do somehow avoid recession we're still in a brilliant position anyway.

Very happy AGY holder right here.

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Exactly what i was saying, BUT you my friend not only nailed it you wrote it more sophisticated

AGY Price at posting: 33.5¢ Sentiment: Buy Disclosure: Held
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