I will say though I'm not sure you are comparing apples with apples by comparing brine in Argentina and hard rock spodumene in WA, on a couple of counts.
First up, the political, economic, environmental and country risk for Argentina are all off the charts whereas all of those risks as good as flat-line in WA.
Secondly, yes there is a lot of lithium in those salars in Argentina but those resources will be extracted over the next couple of centuries whereas most of the known spodumene will be extracted in the next couple of decades. Brine and spodumene present very different business propositions.
Thirdly, the development capex for brine is far more than for spodumene while, yes, the opex for brine is lower than for hard rock. This means it is far easier to get a spodumene operation up and running than a brine project. That was actually the false promise of direct lithium extraction technologies: that setting up a lithium extraction process using brine would be quicker and cheaper than traditional evaporation processes (though check on Lake Resources to see how that is working out so far).
The other point I'd make is that I think a straight comparison of Quebec hard rock with WA hard rock is also iffy. The sensible half of RK Equity, Rodney Hooper, started saying last year that for spodumene projects 50mt was the new 10mt, by which he meant that in the past a MRE starting from 10mt was quite possibly big enough to develop a spodumene mine and plant but as costs shot up from 2022 the threshold MRE for a viable project grew to more like 50mt. I modify that idea by saying that while in Quebec the minimum MRE required to warrant building a mining operation is probably something like 50mt, in WA that minimum MRE is still closer to 10mt than 50mt. The difference can be explained by the fact that the mining infrastructure, service networks and efficient regulatory processes are already in place in WA whereas northern Quebec it is still very much frontier country (for lithium).
Besides, WA operators with the smarts like Chris Ellison have started clustering numerous smaller deposits together and are proposing to put in common-use processing plants, which means those marginal 10mt MRE deposits can still be mined profitably. Arcadium would not have to buy a big project like Azure to stay in WA as they already have a processing plant at Mt Cattlin. As it happens Ardadium is currently trying to put together a bunch of exploration tenements around Torque's New Dawn deposit and MinRes's newly acquired Bald Hill mine so clearly they are keen to keep that option open.
The bottom line for me is that Arcadium does not have buy a mega project for top dollar to retain a presence in WA. However, I do doubt that Pall the Plod Graves has the business wit to put such a assemblage together.
LTM Price at posting:
$7.00 Sentiment: Hold Disclosure: Held
(20min delay)
