I topped up at $5.89. It is much closer to the bottom if you...

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rvajna

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12/06/24

12:07

Post #: 74276302
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Originally posted by TeBee: ↑

My post is very speculative, but I think the answer lies in understanding that ESG concerns widely sprouted by Western companies and governments are just to “present the right image” and have little substance. Congo Cobalt, Indonesian Nickel, and Chinese Lepidolite all independently prove that ESG concerns are completely ignored. There are no consequences for environmentally damaging mining or chemical processing, as long as it's not done in our own backyard. Actions are louder than words and these examples prove the West doesn’t care where the resources come from. The main problem from loud ESG voices in the West is that it just results in more outsourcing of mining and chemical processing to countries with poorer environmental standards.

Provided that they can get their hands on what they currently need, most Western companies are too shortsighted to invest what is needed into future lithium development, and so yes, at some point carbonate and hydroxide prices will increase. The unknown is which year that happens in.

The Chinese see this and are playing their cards perfectly. As long as the Chinese have a source of lithium to process, they are at a massive strategic advantage. If I was the Chinese government, I wouldn’t give two hoots about processing lepidolite or spodumene at a loss if it’s causing the countries electric car companies to be gaining market share while the West potters about. The integrated companies will likely make up any losses by their cheaper labour costs. Also, running some plants at a loss ensures that the West doesn’t develop independent supply and remains locked into Chinese converters.

IMO the Chinese are playing the long game and are setting up to dominate the international electric car market in the next few years. It will take more than good luck getting the processed lithium back out of China if there is a real shortfall, and Western companies will pay heavily for it. Currently, the longer this status quo remains, the better the situation becomes for Chinese electric car companies.

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I topped up at $5.89. It is much closer to the bottom if you believe lithium will boom again.

LTM Price at posting: $5.89 Sentiment: Hold Disclosure: Held
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I topped up at $5.89. It is much closer to the bottom if you...

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