I wanted to address some of the concerns and worries that have been circulating here and Twitter regarding the recent LKE fiasco and its impact on Galan and other lithium companies. It's completely understandable that there's been some heat on this matter. However, I believe it's important for us to take a step back and look at the bigger picture when it comes to the effects of capex increases.
Now, some folks here and on the twitter seem to think that capex increases only affect brine projects, particularly those in Argentina. But let me tell you, it's not that straightforward. The truth is, these capex increases have a more comprehensive influence across the entire lithium mining industry, including our hard rock projects here in WA and beyond. It's actually a global issue, my friends. We're all facing some macro pressures that are beyond our control, resulting in capex increases across the board.
Let me give you a couple of examples to illustrate my point. Take Liontown, for instance. They recently experienced a whopping $350 million blowout in capex. And Covalent Lithium's Mt Holland project, a JV between WES + SQM, faced a significant capex increase of $300 million. And it's not just them; even companies like MinRes have dealt with capex increases during their expansions. Piedmont? Well, they had a capex blowout of around $250 million. These are all hard rock projects...and believe me, I can go on and on with more examples.
What I want you to understand is that these capex increases are not limited to a specific extraction method, project type, or jurisdiction. They have a far-reaching impact on the entire lithium sector and, perhaps, even the mining industry as a whole.
But let me tell you why we should still remain optimistic about Galan. Fortunately, Galan is in a relatively advantageous position due to our exceptional resource. As you all know, our resource boasts high-grade lithium with low impurities, which translates to lower extraction costs compared to others. In a landscape where inflationary pressures are affecting the industry at large, unfortunately some operators may struggle to remain viable. But we're different. And let's not even get into the whole DLE debacle. We now know it takes longer and costs more, as shown by the LKE and VUL capex and timeline blowouts. So, let's give ourselves some time and be patient. I truly believe that we will come out on top as a low-cost operator or get taken out.
The challenges we're facing are not exclusive to brine projects or South American projects. Capex increases have a wide-ranging impact that affects all players in the lithium sector, regardless of their extraction method, project type, or jurisdiction. But hey, we have an incredible resource, and we're in a better position than most.
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