This article from the Guardian touches on the huge push in the...

This article from the Guardian touches on the huge push in the EU on taxing Australian exports into Europe and other civilised economies.

CXO is already highly exposed (IMHO) to the future trans border carbon taxes that will reshape the global in the next years.

I have ranted in these hallowed pages many times about the completely disastrous plan by CXO to run their quarry purely on diesel for two reasons; first I get to live with all the NO and NO2 (both powerful greenhouse gasses; and second because after crunching just a few simple numbers, it's clear that this quarry will produce some of the most carbon intensive LCE in the world.

Credit to CXO they are making noises about decarbonising their operations, but personally I have seen little of that coming to fruition. There is some rumour about using gas powered grid energy, but my friends in Power Water Corporation don't know anything about it.

Apparently they are in discussion with an Australian company to use battery Landcruisers on site. Good if that happens. I heard from a CXO contact they are paying $350K for each Landcruiser ute. My guess these wont be deployed until they go underground.

Let's put this into another perspective; the EU border carbon taxes are coming much faster than any of you people think. This simple notion may well explain why the much vaunted EU off take agreements have not been signed. What EU mineral dealer would touch such a project under that cloud?

Consider to the opportunity for China to undertake a bit of Aussie bashing, by just selling the Yahua stake on the open market, all the while claiming "We only buy green upstream products". The Chinese play the long game.

But there are even more red flags here. Recently a nice CXO bloke called Sean performed what passes for CXO community consultation in Wagait Beach. The reports I have heard are less than stella. One would think that Sean would be trying to facilitate as much community support as possible. It was a huge fail on Sean's part.

One very good friend of mine who runs an infrastructure services company (ICAN certified) passed on his card to Sean, with a view to entering into some preliminary negotiations with CXO or Primero. Even after several emails, neither company could even be bothered to send a polite response.

This doesn't matter to that company because they are pretty busy with Lend Lease and the DOD on Tindal and other major defence projects, but they do have the capacity to help Primero/CXO with certified capacity, local workforce, and a stella track record.

Another friend who is setting up an EV hire business in Darwin (Cox Peninsula in fact) also made a pitch. "Hey dudes, we will have lots of Teslas very soon". Probably just what a "green" company like CXO might need to engage with to you know, make sure the Euro's want to see. Same response. Nothing.

You would have thought CXO would jump at a chance to boast their "green" credentials, and support new business on the Cox Peninsula but clearly that is not going to happen.

According to CXO's original EIS (worthless now) they will be the fourth largest CO2 and NO2 emitters in the NT during the early years of just the Grant's project alone. The water balance projections, imho are pure fantasy.

I'll stick with my original investment thesis on CXO:

• It has all the hallmarks of a pump and dump stock market play (research CMR for a classic example)
• There is nothing "green" about hard rock lithium miners in Australia, and even more so in the NT
• If it wasn't for federal diesel subsidies and NT government subsidies this project will not fly
• They will heavily rely on the royalties paid after "profits" system that keeps the NT poor. No profits, no dividends.
• They conveniently don't mention the global CO2 headwinds against traditional Australian mining practices
• They will not mention the story of the EU border carbon taxes, while floating the possible (but unlikely) notion of off take agreements in Europe. Won't happen imho.
• Even if they do get some product out of the Chinese port in Darwin, the collapse will put a short end to that
• The notion that CXO is somehow going to support the local economy at face value seems to be a complete fallacy.

Until such time as CXO management can articulate even a basic plan to decarbonise their operations, then this silly notion that somehow CXO is a "green" company that is helping the world decarbonise is just that: a silly notion designed to get gormless punters to invest in an ideal that doesn't even exist.

Cheers and namaste

Rummy


Article from The Guardian below

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