Good News & Bad News, page-45026

At times like these, it's hard to see the light at the end of the tunnel, especially when articles such as you linked, repeat the narrative that African supply is flooding the market. It's hard to argue there isn't a surplus when the Lithium price continues to stay in the doldrums.

Problem with these articles is they provide no detail or actual data to validate their claims. No mention of the quality of supply either.

The other problem I see is they keep quoting China miners and refiners. Many of these miners and refiners aren't vertically integrated so that means they are currently making losses or at least, treading water. This isn't sustainable so to I find it hard to accept this new production will continue into the never never, with losses being accrued. Again, hard to know exactly the situation as production figures from the likes of the Sabi Star mine etc aren't available. Mum's the word when searching for production figures, commissioning ramp-ups, recovery, grade etc.

Now, if these mines aren't profitable, how are the African regimes, which want royalty/ tax/ payoffs, going to be rewarded. History tells us the population will rebel, as they see foreign entities and corrupt government officials as the beneficiary's. Considering Africa's immense size and mineral endowment, they underachieve in actual world mineral output and have done so for years. What makes now different? Years on from the Iron ore boom and RIO are only just now building a Iron Mega mine.

If China really wants to secure stable quality supply, they would be better off stopping the BS and pay a decent price for product now, promoting a more balanced supply chain and improve relationships, which become very strained in low price environments. Western suppliers will jump ship the first opportunity they get as western supply chains develop. Unfortunately, that appears away off.