With senior staff walking, with the 100% offtake partner walking after 18 months of DD, with no NAIF support after 15 months of DD, with no other capital on offer, with metals prices still way under the BFS metrics, with plenty of other battery materials suppliers winning contracts with cathode/battery cell manufacturers (Blackstone and Tianqui being recent examples) and not even the ability to keep a web page open.....you'd have to thing Sconi has missed the boat!
What? - another year to find an off-take partner? - then another year of negs over funding? - that's the end of 2021. Then another year of environmental applications and approvals and detailed design. Then a couple of years construction. That takes it to end of 2024. Then 3 years ramp up - 2027.
What else will have happened in that time frame? In terms of HPAL developments in Indonesia, advancement of solid state battery tech, other mines coming on stream and, of course, the power of recycling!
In fact, Daishin Securities sees a short window of joy for Ni in the few years befor 2026 - as the EV transition picks up apace - but after 2026 a real dampening of Ni prices due to the exponential growth in recycling by that time.
Potential funders will be well aware of this risk - i.e the dampening of Ni prices before Sconi has even ramped up - and will be very circumspect. Hence, in my opinion, the lack of funding success - including from SKI.
This extract from a Daishin Securities report explains it well:
Electric car value chain, who makes money when
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Analytical Research |
Daishin Securities Han Sang-won |
2019-12-04 10:35:33 |
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1. Who can earn and when to earn money in the EV value chain? As a result of earnings shock since 2018, the combined market cap of rechargeable battery materials fell 37% from the peak in September 2018.
We believe there is concern about whether to make money in the electric vehicle industry Analyzing the dynamics of major electric vehicle value chain companies from mining companies to electric vehicles and waste battery recycling industries.
Projecting supply and demand of major products by 2025 to check which products will be profitable and when Conclusion: We recommend copper foil (ILJIN Materials, SKC)> premium lithium salt (Tianbo)> rechargeable batteries (LG Chem, SK Innovation)> positive electrode materials (POSCO Chemical, Ecoprobe) in 2019 ~ 2022.
In the mid- to long-term, we need to pay attention to nickel producers (Vale, Norilsk nickel), which will inevitably have excess demand in 2022-2025, and waste battery recycling companies (Umicore, Ecoprobem), which are expected to grow after 2026.
2. The EV market growth process is divided into four stages. Selected promising industry by stage
Section 1 (2016-2018): Major metals prices soared due to surging electric vehicle production and mining companies without preemptive investments. Profitability surged by miners and cathode materials makers
Section 2 (2019 ~ 2022): Metal prices plummeted due to a slowdown in global electric vehicle sales due to excessive investment by mining companies and cathode materials companies and the reduction of electric vehicle subsidies in the US.
It is time for the rechargeable battery makers to turn to the black, reducing the fixed cost burden. Copper and premium lithium salt industries, which have conservatively expanded their production capacity, are also expected to boom
Section 3 (2023 ~ 2025): The increase in sales of electric vehicles is due to the economic advantage of electric vehicles over internal combustion locomotives.
Electric car makers are seeing economies of scale, turning to the black. On the other hand, class 1 nickel products that can be used in secondary batteries are highly likely to exceed demand and increase prices due to the lack of preemptive investment.
Section 4 (2026 ~): The surge in nickel prices should be resolved by the growth of the waste battery recycling industry. Hegemony from miners, which enjoyed high profitability due to high barriers to entry, will shift to the waste battery recycling industry. Despite low profitability over the long term, the market is expected to become a market dominated by top-tier companies that have continuously expanded their capacity and invested in R & D.
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