General Discussion Topics, page-46011

IN THE RIGHT PLACE AT THE RIGHT TIME, ALL THE STARS ALIGN FOR SAYONA MINING LIMITED.

Australian Government forecasters say the value of lithium exports will increase almost 600% from $1 billion in 2020-21 to $6.7b by 2027. A lagging investment in new supply will see lithium miners be the winners of the electric vehicle boom for some time to come, Pilbara Minerals (ASXLS) boss Ken Brinsden says.
Brinsden says spodumene lithium concentrate prices that have increased 1150% in a little over 18 months from U$400/t to US$5000/t are the equivalent of a gold price at US$6000-7000/oz, three times their all time record from August 2020.But the outgoing MD of the hard rock lithium miner in WA’s north, which announced a maiden $114 million half-year profit in February four years after opening its Pilgangoora mine, said it would take a long time before demand destruction sends prices down to normal levels with the underinvestment from battery and carmakers in mined supply sending the margin down to the digger. “Let’s say an average good gold price in the last five to 10 years was about 1500 bucks an ounce US, something like that,” he said at an investor seminar last week. “The equivalent average good price in the spodumene world would have historically been, let’s say US$500-600 a tonne for our spodumene concentrate. “To make the direct comparison, you have to take US$1500/oz to about US$6000-7000 an ounce to appreciate how much spodumene has appreciated in about the last 12 months. “It’s a far cry from the average days in the lithium supply chain world and it’s in response to incredible demand conditions. ”Brinsden attributed much of the astonishing price rise to Covid stimulus measures that have helped fuel mass investment in new energy including renewables, battery storage and electric vehicle subsidies. “The demand has gone through the roof to the point where it’s a really, really big issue for industry today,” he said. Carmakers paying US$75,000/t for 99.5% pure lithium chemicals that were worth just US$5000/t in September 2020 (spodumene, which now trades at US$5000/t contains just 6% lithia) are now having to suck it up. “They were not focused on what it meant to create an interconnected supply chain that was going to supply them with enough raw materials as demand came back,” Brinsden said. “And inevitably it was coming back and today, they’ve been caught short, and they’re going to have to pay through the nose to be able to access raw materials because of that issue for them for quite some time to come.”