Hi all,
After perusing some of the many posts made on the various AVZ threads in the last day or so, I've noticed that some shareholders have become their own worst enemy IMO and have begun jumping at shadows. And the trolls are doing what they normally do and are happily feeding on the fear & doubt that is apparent within the HC forum, and in many instances their motivation seems to be 'payback' related i.e. comments made by AVZ shareholders in relation to PLS, LTR and the local (WA) Lithium industry in general.
Firstly & personally, I have never posted on the A40, PLS or LTR or AJM threads to diss or voice my opinion on those stocks for the simple reason that I don't have a vested interest in any of them, period. Any spare time that I can find (with regards to Lithium investing) is used to analyse and research the Lithium industry and the very few stocks that I hold within that sector (with AVZ being the main holding). Prefer to look after my own small basket of eggs (and watch them like a hawk - IMO a much better strategy than overdiversification and not having the time to watch them all properly - extreme due diligence required this day and age IMHO, and even then there's no guarantee of success) and not worry about everyone has or what their strategy is.
However, my research & analysis does include competitor activity and IMO every investor/business owner should know what his or her competitors are doing - crucial to either remaining competitive or knowing when to sell out and move on to something better. And in AVZ's case I see it's main competitor as the WA Hard Rock Lithium industry due to it's collective size and market share.
And that's really the only reason that I make mention of them when posting on the AVZ forums. My views on the local WA Lithium industry are not born out of revenge or spite, rather they are formed by economic reality. And in all honestly, my wish is for the whole Lithium industry to flourish as that would not only create prosperity, but also signal that the event of a lifetime (that being the 'clean disruption of energy and transportation') has kicked into second gear - meaning that our reliance on burning fossil fuels will have further diminished.
[Sidenote: My family & I have definitely noticed the air quality improvements in and around Melbourne and there has been much discussion (media attention) worldwide about how many city bound citizens have noticed and are enjoying the same. The financial and human effects of Covid-19 have ironically presented to the world a first hand account of 'this is your future & this is what the sky should look like'...
https://www.theguardian.com/environ...lief-air-pollution-falls-lockdown-coronavirushttps://www.theguardian.com/environ...-traffic-spots?CMP=twt_a-environment_b-gdneco... and the preference for clean air vs smog in addition to urgent action to combat the increasing effects of excess greenhouse gases in our atmosphere, will IMO guarantee that the Lithium Industry has a bright future (at least until harnessing the power of nuclear fusion becomes a commercial reality - still decades away from that possibility eventuating IMO)].
However, we are dealing with 'the now' and unfortunately it's not pretty for the local WA Lithium industry or indeed any other high cost producers globally and that's not just IMO.
https://www.linkedin.com/feed/update/urn:li:activity:6658999037691338752Hence why I don't hold any high cost Lithium producers or sub-economic development projects.
Thus it certainly doesn't make any economic sense for FIRB to protect ANY high cost industry and especially those that are up against more competitive offshore projects with Australian part ownership. The bottom line is that Australia needs to be more competitive, and if a global industry demands low cost projects, competitive/sustainable inputs, better services and/or superior product, then Australian Govt protectionism is a futile attempt at delaying the inevitable sh*tshow that will likely eventuate if market conditions don't quickly improve.
One only needs to look at the local car manufacturing industry for reference. The fact is that State and Federal govts. pumped billions of tax payers funds into an industry to protect jobs, however the local car industry made no economic sense (Govts. eventually succumbed to reality and in the end withdrew financial support) and was likely unsustainable to begin with. Those billions upon billions in wasted funds propping up uncompetitive industries (at taxpayers' expense) would have been better spent supporting strong industries (eg. food, agriculture) innovation and developing new technologies i.e. the future.
But sadly our Federal and State Governments aren't forward thinkers or planners, and our political system (made up of powerful unions, industry lobbyists, cronyism and political correctness) is inevitably designed to protect jobs and powerful establishments first and foremost, and in doing so derails or curtails any effort made (by the selfless few IMO) to introduce a list of policies required and designed to support a truly innovative and competitive economy.
And this folks is predominantly why I fear for the WA Lithium Industry, other uncompetitive industries and now Aussie companies seeking to strengthen their competitiveness via Chinese funding and partnerships. What seems to be forgotten is that China is by far Australia's largest export partner, so to suddenly start protecting our 'national interest' over 'economic common sense' will unfortunately lead to economic suicide before too long (like we really need that now, particularly given the current state of affairs).
This is why
'Reality Kicking In' (ironically the title of an AVZ thread created by one of our regular trolls) for AVZ's largest collective competitor - the WA Lithium Industry - has already caused collapse (eg. A40), huge financial distress which may lead to collapse (eg. AJM), massive cost overruns which may lead to collapse particularly without further Chinese investment (eg. PLS), change of focus due to economic reality (eg. LTR) and either mothballing or idling mines and /or cancelling or delaying further investment decisions (eg. WES, PLS, GXY etc.).
One great lesson (from the many years of managing, running/owning or investing in businesses) it is that MAJOR OPPORTUNITIES arise when your business case is much stronger and more profitable than your competitors, especially when many of them are struggling to survive and /or have an inferior product or service (presenting increased risk to their clients & customers). And this where I believe AVZ has a DISTINCT ADVANTAGE over it's competition leading into 2022.
However, given last weeks decision by FIRB (in an attempt to protect WA Lithium projects from the perceived threat that is AVZ), one of main concerns on this forum seems to be (and I'll quote
@Scarpa for example)
'whether AVZ remains involved or not (and ultimately that becomes a question for the DRC government who wants the project developed and not left stalled etc etc).' To answer this simply (obviously my opinion based on research, analysis and relevant conversations with BOD), I don't see that anything has changed - other than a single Chinese entity can no longer take a direct stake (over 10%) in AVZ. The notion (based on FIRB's decision) that the current DRC government might attempt to cast aside AVZ and hand Manono over to the Chinese or the highest bidder to develop Manono is IMO fictitious (and fanciful at best).
There are a few points (and I'll delve into two of these specifically) to explain how and why I have come to this very logical and confident conclusion.
Firstly, anyone who has followed the huge inroads that AVZ has made in building trust at a local, provincial and (DRC) federal level will know that Nigel and his team understand that local TRUST and SUPPORT is an absolute key to AVZ's success. For further explanation, refer to pages 53-57 of the DFS.
Over 90% of AVZ's workforce are already DRC citizens (locals) and AVZ is set to become a major employer in the region.
AVZ, through its comprehensive SDP (social development plan) are also planning to provide potable (drinking) water to the township, refurbish a local hospital, build and supply clean power to locals and local businesses, champion health, educational and sporting programs within the region, and employ and support dozens artisanal miners as opposed to locking them out and forcing them back into unemployment, poverty and despair.
[Sidenote: If you are reading this and are one of the many AVZ bashers who takes great enjoyment by dissing the company, it's management & it's shareholders, then perhaps you ought to think about the massive impact that a successful AVZ will have on an impoverished region where people can only dream about the privileged lives that we Australians live and take for granted. Therefore, why would you hope and pray that AVZ fails and therefore fails to help these people?
If When AVZ becomes a successful producer of SC6 and Lithium Sulphate, let's all hope that your WA Lithium investments/companies (if you're game enough to continue to hold) are still around and have gotten their own houses in order. If not, then it certainly isn't AVZ's fault that your chosen companies' projects and operations weren't economically robust enough to withstand self-induced oversupply in addition to the financial effects of Covid-19.]
Secondly, the Tshisekedi government's obvious DESIRE TO HELP AVZ bring Manono into production is VERY CLEAR AND STRONG IMO. And whilst they may or may not be pleased with FIRB's decision
(note: Tshisikedi has made it publicly clear that the DRC needs to diversify it's investor base (away from China), hence why his government formed a strategic mineral alliance with the US and several other nations. Furthermore, Tshiskedi has repaired old colonial ties and relationships with Germany, France, the EU and The World Bank amongst others, in an effort to encourage an increase in direct investment from Europe)the DRC (and for that matter greater Africa where it is well known) acknowledge Australian expertise in the areas of mining, management and project development - and in AVZ's case the Tshisikedi Govt. have been incredibly supportive given the added benefit of an comprehensive SDP via AVZ's ongoing consultation with the government and local communities.
And that folks, is exactly why President Tshisikedi held an initial meeting with AVZ in late 2019, and AVZ subsequently signed an MOU for Mpiana-Mwanga Hydro-Electric Power Station in early 2020
https://www.asx.com.au/asxpdf/20200115/pdf/44d8p8l5c2cftv.pdfsoon followed by a 12-month MOU for a Special Economic Zone (SEZ)
https://www.asx.com.au/asxpdf/20200218/pdf/44f5ytp6k6fhxx.pdfincluding an SEZ meeting effectively initiated by Tshisikedi (SEZ meeting currently being re-scheduled due to the CV) i.e. to allow AVZ and the DRC government to explore a Private Public Partnership (PPP) and negotiate 'special' terms to allow mining to commence by 2022.
Therefore, any decision by FIRB to block direct Chinese investment in AVZ is IMO immaterial to the terms of an AVZ managed SEZ and potential PPP with the DRC Govt., and I'd strongly suggest that Tshisikedi would be not only delighted by but also pushing for more European investment (or at least a diversified investor base) to financially underpin the project.
GLTA and let's see if the lemmings ignore the DFS and all of the above tomorrow (IMO the current state of play) and instead act on the relentless but largely uninformed (if not uneducated) opinions of non-holding trolls, while the astute prepare to roll in at their leisure and take advantage of a
post-DFS bargain (IMHO) i.e. should the opportunity arise.
Cheers
Elpha
