It would take alot more that a 15% lift in the price of spodumene to make Mt Catlin profitable if we believe that its earlier transfer of spodument to China at $238/ton was fair market value. Australia's impending CO2 tax effective next July will readily knock-off the 15%.(Thank you Julia)
Spodumene price would need to double to make Mt Catlin profitable in its own right!
Talison's own admission that its plant upgrade when complete in the first qtr 2012 has the capability of oversupplying the market (will run under capacity) together with more South American product comming on line in 2012, will oversupply the market. And with brine based product costing about half that of hard rock, one doesn't have to be Einstein to hypothesise that if there is oversupply, hard rock will feel the squeeze.
The latest 15% increase merely reflects increasing production costs and is a long way from prices prior to the GFC when GXY's initial plans were made.
Cheers Moorookamick
GXY Price at posting:
31.5¢ Sentiment: None Disclosure: Not Held
