ALK (ASX) Food for thought!

Originally posted by MrTop5 ↑

Food for thought!

With the Australian government looking at Dubbo, it might be good to look at some of the below quotes. Not to mention the health virus we have at the moment which could halt rare earth magnet supplies from China.

If china stops sending out magnets, even for 2 months. This will be a great boom for the rare earths industry outside china, as a giant slap in the face to the western world.

Nic Earner quote from (7th Jan 2020 General Meeting Alkane)

"The key to this game (rare earth project) is these are large capital projects that need consistent revenue in order to support debt and have people take risk in terms of development. The best for that is if a major player says "yes I want your products, I am prepared to buy it consistently year on year on a stable pricing arrangement and not only that I want to secure my access to that by taking a strategic stake within your project" because that gives everybody lending confidence that this is going to occur. If you look at Lynas the confidence came from Sojitz the Japanese trading house coming in with offtake and funding and Jogmec the Japanese government lending money as well. And of the 1.6 to 1.8 billion, those guys only put in around 300 million dollars. But they put in most of the confidence."

Other Director from 7th Jan 2020 General Meeting

"Are you familiar with the story of the frog in the pot. If you put in a frog in a pot of cold water and gradually heat it up it will not get out till it dies. But if you put a frog in a pot of boiling water, it will jump out. We see that in this sector as well. Vehicle manufactures buy electric motors from sub-suppliers, so they don't feel pain (e.g. Vehicle Manufactures) when it comes to supply, they pass that pain on to the sub-supplier who is perhaps buying the rare earth magnets. The sub-supplier isn't actually making the rare earth magnets they are buying it from someone else. So they don't feel the immediate pain either. Its the supplier of the rare earth magnets that would feel the pain if there is a shortage of rare earths. But most rare earth magnets are made in china. Who has 90 plus per cent of the supply of the rare earths tied down. Right at the moment, none of the big corporates who are making the cars that are buying the parts are feeling any pain. And they believe that if any of the pain is going to be felt it will be managed by the subsuppliers. So here we have the frog in the pot. The water is getting warmer, its been getting warmer for a little while, they know demand is increasing for electric vehicles over time. But they have this myopic view it will work out somehow. But it won't; we know that we know demand will outstrip supply by the time it takes to get new mines going. But we are getting closer and closer to that tipping point where someone had to do something."

The Australian paper today page 25

GM's pitch to Wall Street: Our future's electric

"The company said it would spend $US20bn ($AU30bn) to develop electric and autonomous vehicles, quantifying for the first time its bet on these burgeoning technologies."

"Automakers have committed a combined $US225bn toward electric vehicle development over a five year period ending in 2023".

Nic Earner quote from (18th May 2018 Investor Presentation)

"If you look at my fundamental point, the Electric Vehicle supply chain has to include rare earths, if you are investing in lithium and belive the price forcasts, you have to belive the demand forecasts for rare earths. It is an unavoidable truth. The rare earth production, therefore, must increase worldwide; there is not enough supply to meet demand, there just isn't. You can hope there is; you can wonder if there might be, you can assume the Chinese will rise to the demand to meet the western world demand, why they would want to defend out western world manufacturing industry I don't know? But I don't think they will. So new projects must come online. "

Expand

Nic needs to check his facts, Lynas raised $450M from mkt in 2009 0n the strength of six LT offtake contracts, sufficient to complete Phase 1 at LAMP.

That commercial base gave JARE (JOGMEC/Sojitz) the confidence 12 months later to lend the ~$300M for the construction of Phase 2.

Govt funding will almost always be dependent on a commercial commitment prior, and at the least matching funds.

No.	Vol.	Price($)
2	47384	57.5¢

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47384

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58.5¢	20486	2

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58.5¢

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1	46279	0.575
5	95509	0.570
3	130747	0.565
4	26246	0.560
1	9310	0.555

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46279

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130747

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26246

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9310

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Price($)	Vol.	No.
0.595	10000	1
0.605	22000	1
0.610	1682	1
0.615	41666	1
0.620	4231	1

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0.595

10000

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1682

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4231

(20min delay)
Last 57.5¢		Change -0.010(1.71%)		Mkt cap ! $346.9M

Open	High	Low	Value	Volume
58.5¢	59.0¢	56.5¢	$1.109M	1.920M


Last 57.5¢		Change -0.010 ( 2.08 %)
Open	High	Low	Volume
58.5¢	59.0¢	56.5¢	493430
Last updated 15.59pm 03/05/2024 ?

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