It would be interesting to know how many people have had their expectations changed by all the recent capping of the share price.
In my mind nothing has changed except for the value of the resource increasing officially by the most recent jorc update with a resource of 128Mt.
People are trying to manage down expectations by using the reserve number of 60Mt or even better using older numbers in reports, from outside the company.
In my mind what the older gentleman in the 6th row at Benchmark in Melbourne really struck home. When the vanadium question was asked, he was pointed out as the person to answer as he was the recognised expert in the room.
When he stated that Vanadium batteries would never be more than a "boutique" market, there was pretty much silence in the room. Everyone was stunned, because this meant a lot to the Li-ion battery industry.
He was telling us that lithium was the future, and not to worry about Vanadium flow batteries as large scale competitors for grid scale storage.
@jorpra I think can back me up on this and so could a few other HC people that were in the room.
This virtually doubles the usage of Li-ion battery needs across the world, and in the shorter term not the longer term!!
Here we are looking at peoples expectations on possibly the largest spodumene resource on the planet, a product that is going to have massive demand in the next 20 years at least and probably longer, with billions of dollars being spent by car manufacturers on research and development of EVs, plus something like 20 gigafactories being built around the world and more planned, yet sitting on the largest resource in the world is not good enough for some.
What will you invest your $1/sh or $2/sh in??
What sort of return is the next thing you invest in going to give compared to what this mine is capable of giving??
Please tell me how you can find a better investment, today or in five or 10 years time?
Lithium is the metal of the near future and having possibly the biggest resource in the world means a lot given the current prices. Ken clearly stated that Chinese spot prices were part of the formula in working out what we would get paid. For quality lithium that is not coming down any time soon. In fact the expectations are for the price to spike again after the CCP have announced the green light about new Energy Vehicles, or when the supplies from Tianqi/Albermarle finish up fairly soon. Take your pick, the price of quality lithium is going up.
Then as these gigafactories come online one after the other over the next couple of years, the price should go higher as demand goes up massively with every new factory.
Because of the changes in one short year, everyone can see a future when you cannot buy an ICE car. At that time even if there are successful fuel cell vehicles, the largest market will belong to Li-ion IMO, because it will be cheaper and easier to refuel.
Taking a figure of just 70M EVs with an average battery size of the model3 and the average use of lithium being the same as that vehicles, we get 70,000,000 X 63kg = 4,410,000,000 kg of LCE divide by 100 to get tonnes = 4,410,000t of LCE
Just for cars we will need 4.4 million tonnes of LCE. I can easily see this happening in the next 10-15 years, such is the speed of disruptive change that we are clearly seeing.
The growth rate to get there from the current 160,000t of LCE will be immense, yet when Trucks,Buses, EV bikes, Trains, Boats, Tractors and Grid storage are all included, the number for the future will be more than double than for EVs alone.
The biggest problem is going to be keeping up with the required production of lithium and probably Graphite, Cobalt, Nickel and Copper, all of which will be required in massive amounts.
Between now and the future where the growth in use of lithium slows down, prices will stay high IMO, and go high for many of the above metals, but lithium seems to be the critical one.
How can we just give away a huge resource like we have, with that kind of future rushing at us?? To me this resource of ours is a strategic resource of massive value, because it and it alone can fill the gaps in supply as they happen when the gigafactories come online one after the other over the next few years.
With high prices for our product virtually guaranteed for the next 7-10 years IMO, the size of our output and profits should be also huge, and growing as output grows.
After 4Mt/a we have the resource to go to 6, then 8 then 12Mt/a, our resource is open in so many directions, that it is very possible, to do this unlike anyone else.
Let them play with the SP for now, but don't fall for the trick of reducing your longer term expectations, as the owner of this resource is going to make billions upon billions of dollars over the years, and pay billions in dividends.
I want my share of that future, and I don't want people to give away another great Australian resource for peanuts.
(20min delay)