Response to
@kcwin - That's precisely the point. You've hit the nail right there. " its a better outcome for the JV " , and NOT just Piedmont.
And the more I read over some of the more recent narrative in the ' Strategic Review ' , and particularly those comments surrounding the 4th PILLAR , the more one could almost believe that the original 50%or greater LOW PRICED OTA was intentionally done so for TWO reasons. 1.) To almost guarantee the downstream a lower ' Averaged ' input concentrate costs , and 2.) That the 75% /25% structure that its came as an upfront trade off to was in effect to allow for a THIRD partner to enter.....so much in the same way had Nemaska with its original Pallinghurst - Livent , and nowALLKEMto take it to the next level.
So this trade off study if you like is another way to ' pave the way ' if you like as to what this potential structure of the Carbonate JV with a THIRD player might look like with Piedmont's 50% of concentrate being factored into the input side......hence the references to ' Agreement ' by BOTH JV parties. because this was the INTENT of the OTA all along ...., but would require agreement in part to also endorse the entry of a THIRD partner ....and on what terms . 50% new partner , 25% each with an ' Average ' cost of concentrate being split equally with Piedmont and Sayona.
I guess the question then is how much is 50% of the Carbonate chemicals NPV worth in attracting an upfront contribution from a potential new THIRD partner.
So then to an extent , the same things applies to the Moblan project but instead for Hydroxide AND the 40% or 50% of the concentrate.
So how much UP FRONT is required to inject into BOTH the ROCK ( ie spodumene ) , and the Hydroxide expansions NOW . ie in today's dollars not 5 or 10 years from now.
So by all accounts watching what has been unfolding here in Australian with SQM and the Rineharts with their well in excess of $1.5 billion values for just the ROCK.
Keep in mind also that SQM's first half ( not 3rd Quarter ) figures were comprised of Net Income of only US$1,330.1 billion which was 20% from the year previous with US$1.7 billion of distributions being made to the Chilean government..
And while its comparative earnings for the first half was 20% its second quarter was down 32% from the same quarter a year earlier in 2022 with its margin of gross profit as a percentage of sales dropping from 53.3% in 2022 to 44.5% in 2023.
And all of this from a Company who market value is only US$13.4 billion. So its spending potentially over 11% of its value on a project which is yet to have even proved up a JORC resource yet. Begs belief really....unless they know they are not going to be successful and the bid was only designed to ' pump ' current project valuations more globally. Because it doesn't matter what they repatriate back to Chile , their goverment is still going to get their cut.
O.K so even if Moblan is HALF the resource to that of Andover and obviously has poorer logistics to port etc....due its remoteness - it ultimately has a potentially much LARGER market right on its doorstep for downstream than does the competing AZS has in Australian where it too will most likely have to build its own conversion facility.
So it could easily be at least a $billion dollars upfront for an equal partnership in Moblan.
And to have that sort of investment loose change , whoever they are would have to be quite large.
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