Thats a great post@Apprjojo. I am a PLS & Gln shareholder and was thinking along similar lines to yourself last night when digesting the AKE/Livent merger. If you look at PLS, its has a great asset with Pilgangoora (included the acquired neighbour of Altura) but if you now compare it to the asset profile of a merged AKE/Livent it looks very "undiversified" in terms of one geography, country and product , hard rock spod. Yes its trying to do something with Calix to reduce waste but that could be some years away before it really converts.
The way the industry could go from here with a race for scale, likely you could see all the bigger players want a mix of hard rock and brine as this then gives them access to customers in the the key two battery chemistries , LFP and NCM, which both I think will settle in around 50 % in terms of global share. Higher LFP in China but likely higher NCM in Europe and US. Also a mix of jurisidictions is always a plus with country risk and helps market access risk with resources coming from some jurisdictions getting favoured status for import to other jurisdictions like with the IRA in the US.I think with a few making calls for Argentina to be given preferred supplier status under that IRA that now is more likely than less likely as the US will want to try and encourage less supply to be directed to China. If that happens that will be another big price catalyst for Galan.
PLS has been quiet to date on even talking acquisitions but its actually way more cashed up then AKE/Livent. AKE hasn't been fast to scale and hasnt been generating huge cashflows so it made it hard for it to do acquistions itself particularly when it already had a number of projects and hence mgt distrations on project's progressing through development like James Bay. PLS is a different kettle of fish, largely bedded down production at Pilgangoora , well on its way to scaling well to 1 Mt ton of spod by 2025 and they are just churning out cash now. Way more cash generation currently than AKE/Livent combined. So yes PLS could be a dark horse here for a move on someone like Gln. My other top contender but is SQM as they will want to diversify away from Chile after the whole soft nationalisation there and they to need to keep scaling if they want to stay ahead of other's like PLS and the combined AKE/Livent.
The other thing that yesterday's announcement makes clear is all the larger Lithium producers probably are thinking there is an opportunity here if they scale quick enough over next few years, then the lithium industry will come to be dominated by a different set of large players altogether than your normal commodity players like your RIO's , BHP's and others. RIO will end up pretty much insignificant in the Lithium space despite all its talk of going green. RIO doesnt need to be in this space but they make plenty noise of wanting to be in the space, but I think you will find they will end up missing the boat to be a dominant player in the Lithium space. If they finally do get their act together they are going to have to pay some real premiums to get into the space but I detect a real hesitancy to do that from current mgt as they know if they do and screw it up, it can be career ending for top execs.
GLN Price at posting:
$1.22 Sentiment: Buy Disclosure: Held
(20min delay)