Given Livent's main focus is on producing Hydroxide, I suspect...

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BytheHorns

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24/12/19

01:12

Post #: 42111607
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Originally posted by Sjlasx ↑

Realistically you are looking at a commercial operation late 2022 at the earliest.
Talking about current Orocobre pricing that is well below the marginal cost of production for any independent spodumene converter is perhaps a little short sighted. Yes it is tough to forecast where the price of Li Chemicals will be in a year, but it is a little easier when you know the marginal costs of the competition and those current ORE prices are simply unsustainable.
As for purification of a primary grade product that is suitable to clean, there is also the option of refinery into BG Hydroxide which would have a similar Opex.
I could envisage a scenario where a producer like Livent would be looking to source additional suitable material to purify in North America. Who knows, the European market may be looking to establish hydroxide converters near their own battery facilities.
While most holders would prefer to see SDV produce BG product from the outset, I actually think it is a smart move given the technical difficulty of extracting suitable lithium from brine. Get that right first and then consider what would be a relatively low Capex purification stage later when industry sentiment changes with the cycle and financing becomes friendlier.

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Given Livent's main focus is on producing Hydroxide, I suspect it is very challenging to produce a Battery Grade Li2Co3 from the Hombre Muerto / SdV brine chemistry.

Not sure what happened with Vijay Mehta but early on around 2016 he was named as one of GXY's main technical gurus for SdV but that appears to no longer be the case...?

Livent have been sourcing 'tech' grade Li2Co3 from 3rd parties for conversion to LioH for awhile now so that might be one option for GXY to look at. Honestly I can't see that as a viable solution given Livent's expansion plans and healthy cash position it makes much more sense for them to expand on their own 75 year resource development to keep opex as low as possible.

If ORE's realised pricing gets down to or below US$5k pt and taking into consideration ~10-15% of their saleable product is supposedly 'purified', it is very hard to see GXY Mgt having the kahunas to green light SdV based on their recently proposed strategy. Margins too thin / no room for error.

Let's hope 2020 can see sentiment, demand and LCE pricing begin to bounce back and with improved market conditions, hopefully new projects can get funded.

GXY Price at posting: 88.5¢ Sentiment: None Disclosure: Not Held
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