General Discussion of AGY, page-3951

Pilot plants, cost and scalability...


FUD:

Making 5t BG at a loss isn’t considered a success


FACTS:

The cost of production from the pilot plant is irrelevant. It always was and always will be. Anyone who understands pilot plants and prototyping knows this. My lemonade example illustrated this point in layman’s terms but the truth was too real and too clear for all to see.
The primary purpose of the pilot plant was to refine the process flow sheet, determine the required key steps/reagents/energy, and demonstrate production of a reasonable amount of on-spec product - showing that it can be done in an industrial environment at an industrial scale with industrial equipment. It also provides samples for customer acceptance testing.
The primary goals of the pilot plant have been achieved. Knowing the actual reagent and energy requirements are key, as these make up circa 80% of operational costs for producing BG product. We know these now, for our brine and our specific effective process. We also know what they cost at a commercial scale, know what the required equipment costs, and know what manpower is required for a commercial operation - in contrast to a relatively inefficient pilot plant arrangement, which incorporates many inefficiencies due to cost, time, complexity, flexibility, and simply because they are unnecessary to identify the key desired findings at that stage. It was built-for-purpose and fit-for-purpose.
We have estimated commercial production costs @10ktpa to be mid-$4000/t, based on the Rincon BG production/testing to-date PLUS the experience, expertise and contacts established over decades of commercial Li production from brine in the region. These aren’t some taxi drivers having a shot at Li production via complex chemical processing. We have a world leader in Li brine processing at the helm of operations - a proven expert delivering so far what many said could not be done from Rincon.

Claims of the costs of pilot plant production in any way representing future costs are sheer nonsense. There are two core cost components (besides the ponds, which we also known at scale) that drive operational costs - reagents and energy. These are known for OUR process now, and our Li brine expert has assessed these in the context of a commercial operation to determine that a 10ktpa plant will be running at around $4500/t OpEx. Also, whilst they haven’t divulged the expected OpEx of the interim stage 2ktpa plant, the company has said clearly that they expect this lower capacity operation to be profitable also.

Beware of being led astray by the unsubstantiated Fear, Uncertainty and Doubt being spread in relation to the relevance of the pilot plant costs or the scaling and conversion of costs for commercial operations. Ask yourself this: are the people spreading FUD in possession of any evidence to suggest that what the company has reported is incorrect, inaccurate, flawed or otherwise unrealistic? Are they experts in Li brine production? Do they have intimate knowledge of the specific chemical process and equipment and system designs to be able to claim that pilot plant costs are in any way applicable to future commercial operations? Remember the core cost elements: energy and reagents. Pablo KNOWS what is required and KNOWS how to build and operate a commercial operation. He knows what translates and what does not. He has run detailed analysis based on actual production processes for BG Li and expects profitable operations at 2ktpa, 10ktpa and 15ktpa.
He has done this before, for many many years.

Speculation otherwise is “interesting” but remember who’s evidence, experience and expertise trumps who’s.

Stay tuned.