…you can imagine the Africans and South Americans being able to continue producing despite lower prices because their wages are a lot lower, energy costs too and they rely on their lithium production as a source of foreign exchange which is a different mindset to free market economies like Australia and Canada which allows their private companies to close their plant if it becomes unprofitable to do so. Private companies in Africa and South America operate under licences as JVs with Govt owned entities, and could get their licences revoked if they suspend operations.
Only PLCs in free market economies would contemplate putting their lithium plant under C&M because it is ‘not their company’, try to preserve cashflow rather than going out to raise more capital and dilute their shareholdings and cause their share prices to tank further. The thinking of PLCs differ to private companies. If you are a unlisted private company owner, generating revenue by continuing operations would provide cash flows to keep workers, service loan repayments and avoid losing customer contracts and relationships which could be lost to competitors during downtime.
…Lithium Hodlers thinking that lower prices would result in global output cuts are misplaced in their belief - if our Australian miners can’t operate profitably, it simply suggests we aren’t cost competitive and we have to find alternate ways of operating.
