The two big SP catalysts for PLS going forward are recoveries (and therefore costs), and the partnering process, IMO.
We do not know the identity of the “counter parties that are involved in the final leg of the process”, but Great Wall Motor Company is an interesting group to consider.
To the best of my knowledge, Great Wall (together with their “offshoot” SVOLT), BYD and Tesla are the only OEM’s producing their own batteries. SVOLT is targeting 100 GWh battery capacity by 2025. They believe their batteries have higher energy density, last longer, and cost less to manufacture. They are also working on a cobalt free battery. At 100 GWh capacity (assuming 65% utilisation), SVOLT will require ~ 60ktpa LCE = 480ktpa SC6.0 = 40% of PLS Stage 3 production.
PLS has also labelled Great Wall a “chemical converter” (D&D Presentation). If they are indeed a converter, or planning to be a converter, they would be the only OEM, globally, to produce their own lithium chemicals. They already hold shares in PLS, but if they were to own an interest in the project (through the partnering process), they would be the first OEM to directly control their own battery production and raw material resource.
Ken has described Great Wall as an “amazing organization”, “very innovative”, a “very sophisticated organization” (D&D Presentation). High praise indeed.
Remember also that PLS has a first right to participate in the ownership of Great Wall’s future chemical conversion capacity. A conversion facility would not necessarily need to be in China – SVOLT are planning battery manufacturing facilities in China, Europe and the US. They also have an R&D centre in South Korea, with plans to establish other R&D centres in Japan, Europe and the US. A conversion facility anywhere in Asia could make sense.
Great Wall have a market cap of USD9bn. They could finance a partnership interest without too much trouble, I suspect.
Partnering with Great Wall would make a lot of sense for PLS, IMO. If bottlenecks are going to be a feature of the EV supply chain over the next 5 to 10 years, being connected to battery and EV manufacturers will contribute greatly to success.
Could PLS become, through Great Wall and POSCO, the most supply chain connected lithium raw material resource globally?
Food for thought on an otherwise gloomy day.
AIMO
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