general discussion, page-1656

Thanks ken,
Ditto.

My statement re insignificance of stage 1 and 2 was in relation to the price of Mg. Yes LMG can change the market demography but I don't think they will have much influence on price which will remain dictated by China.

I do agree that if the Hydromet process is demonstarted at commercial scale with good efficiencies it has the potential to revolutionise the industry. In addition it may bring new players into the market - those who have ample fly ash waste and tailings from Ni extraction(don't forget also that China has both). I can't see China's dominance eroding much until the late 2030's and that's only a possibility because China can also adopt the hydromet process and with their low labour costs will have a lower cost of production hence ability to control price. I'm not a great fan of the way modern China does business(nor the US for that matter) however I do struggle in a moral sense - Do will have China as an investor to accelerate stage 3 and make lots of money for LMG and its shareholders???........or do we hold the high moral ground and endure the red tape of dealing with a west alliance so we feel good. Will the US, Japan, Korea walk away from LMG if they have a Chinese company as co-investor? Don't forget that we will be pruchasing some materials(magnesite) from Chinese owned company up the road from where we build stage 3. I would probably prefer to not have China as an investor in stage 3 however I would be keen to see a plant built in partnership with China at another location. Better to have them in the tent pissing out than outside pissing in, so to speak.

The West may be prepared to pay a higher price just to avoid purchasing from China however the emergent economies(some Asian, South American and African) will not be so sensitive to the geopolitics and the green label. In the end they want Mg for manufractiring to earn export $'s for their country!

One other important point, is that LMG only have the hydromet patents until 2030(exception of India which I think is 2025), then they expire - that's less than 6 years. That's also the limit of their patents licencing and when there is only 2 years left, they won't be able to licence because countries will make development plans and wait for expiration. If there was reasonable Australian Govt help they could have phase 2 ready to construct once process is proven but as I have said before Australian Govenment seems to only support mature industries.There will be a residual advantage post patents that LMG will have the know-how on optimising the extraction process which may give them some time. I am under no doubt that China could build a plant for the hydromet process in less than 12 months. They only then need to poach staff from LMG to get to quick production. This is why LMG's delays do so much damage to the company. They need to take advantage of the patents before expiration. Once they are able to demonstrate Phase one efficiency they need to get cracking on stage 2 and 3 in parellel. The only way I can see that happening is with a new CEO. DP's work is done after phase 1. They then need a new CEO to drive the company ensuring phase 2 and 3 get going and well a truely operational before patent expiration.

I don't disagree with your thesis Ken, however i think LMG could be much wealthier working with Chinese investors than excluding them. I find it sad that the Australian Govt is not supporting companies like LMG much more strongly to fast track to production. I have this awful feeling that the State govt is going to put up lots of red tape for stage 2 approvals - hope I'm wrong.

Always like reading your input and perspectives, happy to hear alternate views not only from you Ken but there are many others on this forum who have some great ideas and foresight. Only throght contructive debate and challeging each other that we will get to a better understanding for the best way forward - and whther to buy, hold or sell!