Thank you for bringing this interview with Jose Hofer, Senior Analyst with Benchmark Minerals to my attention. IMO, it's these kinds of interviews and opinions that readers should be taking note of, and not anonymous posters on social media and chat forums.
https://investingnews.com/daily/res...conversion-capacity-challenges-south-america/
IMO, this interview is worth taking the 12 minutes to listen to in it's entirety. If you want to skip to the part that is specifically about South America and the big opportunities and some of the challenges for this region (these are the interviewers words, not mine), you can skip to the 7:10 marker.
With respect to exactly what Jose said in relation to Argentina, my summary is this:
- growth in demand currently around 340t, and forecast to about 1million tonne over the next 6 years
- huge amount that needs to be mined, converted into chemical, in a secure and stable way that needs to meet specific standards to get into the battery grade material
- this is a big challenge, not only in terms of funding but to achieve the right specifications, and the consumer (eg cathode manufacturers) are very stringent on the particular composition, impurities and size of the particles - as well as needing a stable supply of material
- there are plenty of opportunities for South America with the majority of global brine reserves being in Chile and Aregentina.
- producing from brine is more challenging then many people think
- a significant benefit for both Chile and Argentina is that cash costs are low
- however, for Chile, the royalties might increase costs a bit
- and for Argentina, funding is a complicated issue (and they are the only 5 words Jose said about Argentina funding... he didn't express a lack of confidence in Argentina, only that funding was complicated).
- ramp up of projects can be hard compared to other regions such as Australia.
So challenges are:
- Brine conversion isn't easy
- Consumers are very stringent on product composition
- funding can be difficult, and
- project ramp up can be hard
So AGY relevance:
- They've proven the ponds, pilot plant, process solution
- They've proven their produce specification and signed a sales agreement with Mitsubishi
- They're not in ramp up mode but rather starting small scale production
Looks like they have ticked off all the risk considerations so far, and are probably at or near the top of list for those considering funding a project???
(20min delay)