Annual Earnings for PLL : The matrix SQ, page-26

Hi Herbie,

So, not quite the point I was trying to make.

The "input cost" is the same - it is the "spot price" that the spodumene convertor (LiOH refiner) pays for concentrate. As PLL has said many times - they are paying that to themselves (for Ewoyaa and CLP and $900 for Abitibi). The same is true for LTR when they get into the convertor business. What is necessary is to long at these as separate businesses ... mine/concentrate (upstream) & conversion/refining (downstream) .. bit like oil companies dare I say.

Separate businesses because I dare say they will have separate balance sheets & capital structure and ownership structure (IMO).

On the mine side PLL have said (in their BFS for CLP) that their SC6 "supply cost" is $687/t (this is over the life of the convertor) and $234/t cash cost for CLP sourced concentrate.





These are all very numbers when you are considering project returns.

So again, in the case of the OTA with SYA it ought to be easy to say if I buy something for $900/t and sell it for $6,450/t is that a better business than buying something for $45,000, spending another ~$4,000 converting it and then selling it for $75,000 (don't forget LiOH plants don't build themselves and there is considerable risks in that business). This is why the JV of a NAL LiOH plant is not a slam dunk ... prices wont stay this high forever and a lower price favors the JV happening.

Otherwise ($6,450 - $900) * 113,000 = ~$627M for 1 yr of EBITDA (as @banksy808 notes also). Prices will normalize (eventually).