Listening to this episode, the main that stood out was where MergeCo will find itself after the merger has been consummated.
The point was made by Andy Leyland that the current price of LCE, (~$US11,000/ tonne) means that very few, if any spodumene producers are making money.
At ~$US15,000/tonne, producers like , PLS, LTR, MergeCo, etc will be making money.
He said the incentive price to encourage new players to join the market is ~$20,000/tonne.
If that is so, for MergeCo a price slightly above $15,000 but not too close to $20,000 would probably be the sweet spot.
As MergeCo is somewhere very close to break even, it won’t take a whole lot of improvement to be in the money, even at these depressed prices.
If the price shot up to >$20,000/tonne, new players would come flooding back in, over supply would kick in and we would be back to where we were last year.
So we want it to be better but not too much better.
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(20min delay)