It is important to remember that these megafactorys are modular. So SK may start with 20,000t per year ,and may well have that supply already locked in but will need to add 10,000t/pa until they reach their 60,000t factory limit. At any point they could offer NVX one of those contracts. NVX has a 500t contract to fulfill now which leaves 1,500t spare capacity that is not contracted (that we know of). Presumably they could push that production to 6,000t at their current site. Once they have been manufacturing for 6 months (xmas) and have their DPMG process in full swing, with all bugs ironed out then they will be in a position to take on 10,000t or bigger contracts. Finance wont be an issue and will be debt funded. At the moment capital costs are around $10mln per 1000t, or 100mill for 10,000t which I imagine would come from interest free govt loans etc. Even the big clients could simply cover the loans as guarantor or simply by providing take or pay agreements. In regards to cost advantage there is 1 glaring possibility here to use natural graphite instead of syngraph. The DPMG process may dramatically reduce the quality difference anodes made from natgraph and syngraph. I am sure natgraph is much cheaper. Chris Burns is a scientist, I am sure he would already have done that exercise but not that we would know at this point. So the future has many permutations but unlike Vivo I suspect NVX will have a significant part to play in the american market. Feral
NVX Price at posting:
92.0¢ Sentiment: Hold Disclosure: Held
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