Ann: WAK - Stage 1 Progress / Delay in Full Production Rate, page-29

I have been trying to get a fix on a realistic current FOB price of Kaolin to support my gut-feel $A300. The CIF price was stated to be $320 in the Breakaway analysis of July 2021, so I imagine that they were circa December 2020 prices.

Googling “FOB kaolin” found the table below, but did not help, because it only provided $US values. Even if the tonnage were shown, the FOB price calculated would not be apt for WAK, because WAK currently is focused on a low-tech product (dry-blown kaolin 15%), whereas the rest (wet processed 40%, calcined 20% and metakaolin 25%) have a greater processing component in their pricing. The foregoing percentages were mentioned in the November 2020 Prospectus, and the percentages relate to tonnage, so the dollar-value percentage for dry-blown kaolin would perhaps be hallf of 15%. Metakaolin is calcined, but it is a concrete-mortar grade product that is not on par with calcined kaolin for other applications.

In time, WAK can produce the higher-value products, and ultra high-puriy alumina, subject to commercial viability. WAK's first step in that direction is wet processing, which it plans to develop using the pilot K99 plant at Kwinana as a starting point. I have excluded all value-add considerations from my SP evaluation model, and bundled them into an inestimable box that I use to conjure a high share price as a “fond notion”.

The purpose of this post is to focus on East Asia (flagged * below), and draw attention to Singapore, Malaysia and Hong Kong – geographies that I do not recall being mentioned by WAK. I also do not recall South Korea being mentioned, other than that companies that WAK has mentioned claim to be distributors to South Korea. The information below underscores the fact that kaolin is not a fungible commodity, so geographies that export a variety of kaolin products also import kaolin products.

Brazil Exports for April 2022

	Column 1	Column 2	Column 3	Column 4
0	*China	9218.3​	European Union	4110.28​
1	Argentina	1258.57​	Netherlands	915.38​
2	Spain	673.9​	Chile	663.93​
3	Mexico	579.19​	*Singapore	540.85​
4	*Japan	528.45​	Germany	526.7​
5	India	482.41​	*South Korea	466​
6	Canada	456.41​	Italy	448.41​
7	*Malaysia	393.65​	Colombia	386.55​
8	South Africa	276.64​	Portugal	276.14​
9	France	263.66​	United Kingdom	261.01​
10	Paraguay	259.42​	Peru	243.54​
11	Egypt	236.25​	United Arab Emirates	218.77​
12	Iran	211.33​	Saudi Arabia	203.92​
13	*Taiwan	191.19​	Uruguay	179.32​
14	*Hong Kong	120.59​	Ecuador	105.55​
15	Philippines	102.19​	Russia	91.98​
16	Venezuela	88.83​	Switzerland	79.25​
17	Australia	50.95​	Nigeria	49.32​
18	Sweden	32.13​	Ireland	12.76​

If I were to select one non-East-Asian export market, it would be the Arabian Gulf – Bahrain and the United Arab Emirates (mainly Abu Dhabi and Dubai). Exporting to the Arabian Gulf has a from-Australia shipping advantage relative to from Brazil and from the USA. Being former British protectorates, English is a well established commercial language, plus those islands have had an educated and reliable importing fraternity for decades. Like Singapore and Hong Kong (also ex-British protectorates), Bahrain, Abu Dhabi and Dubai have significant entrepot trade with neighbouring countries.

When I was in the exporting game, the above mentioned islands always paid by letter of credit, so as soon as one presented shipping documents to the nominated bank, one got paid. Australia exports a  fair quantity of alumina and meat to the UAE – see https://www.exportfinance.gov.au/re...xports to the,are crude and refined petroleum.