Lithium - Challenge Your Investments.

This is a long one.....One for the boys to be jealous of!

aaaaand might be creative after a few Soju... Korean BBQ night... yummy!!!

Strong start... great subject... Lithium... and Challenging Your Investments.

Makes sense right? We are all here to make money.

And of course of late some companies have done very well and been promoted greatly... Congratulations Michael Langford and Airguide.. - I am impressed. - I told you I would say it if you proved me wrong as you have.

I think there is some integrity between people that have been on these forums for a long time.. Whilst we don't all sit on the same side of the fence its fair to say when we see one of us succeeding it isn't something that should be overlooked.

Well done!!

Recently I have been challenging my investments... I know our good friend Jen's loves when I talk about this.. That's right Jen's you do get a mention in this post. Though stop shouting at ghosts. I don't hide behind anything more than you really know.. ok!?

So yep, challenging my investments.. have been.. makes sense.. seeing the share price go down again despite from what I see the share price still going up... Though, I have seen these various stocks in hard rock and brine going up... why?? - Well, they are cheap, and they are a punt. They are all the biggest right? PLS, BGS, AVZ... All the biggest....

But..

Let's talk about another largest.

Mineral Resources...

Recently the media has been telling us all that Mineral Resources is one of the largest lithium producers on the planet..

Seriously... the media will tell you this... - Believe me... many sides! lol - Thanks Donny!

The truth is they hold about 40% in Mt Marion that is producing 4% concentrate and from what I understand are struggling.. - No one has a clue what grade of lithium is being produced from that export.

And that brings us to DSO... This is the thing that Mineral Resources is considered to be the largest producer of lithium...

haha*cough*haha

The DSO is something that gets many people confused.. and I have been very curious about how it would work.

Sooooo, I thought I would challenge my investments and seek information outside of Galax & Co...

....along with Joe Lowry and anyone I would generally consider worthwhile listening too...

And you know... cleaning toilets and stuff I often bump into some interesting people willing to offload. *cough*

Maybe I should have titled this DSO 101?

Anyone new???

The DSO is an element of possible lithium production that affects all lithium companies.. quite simply put this is how it appears.... dirt from the ground containing lithium that is shipped to China to be converted into lithium.

What happened to the need to convert into 4% upwards? (Galaxy shipping 5.5% upwards)

Well, the plan for the overseas converters I have been told is that they have methods to convert the DSO into a concentrate.. But.. it isn't working out.

Simply it's this... There are only as far as I am aware a couple of converters in China.. One of which at peak is only capable of maybe up to 40,000 tonnes per annum.. maybe... its been shut down for quite some time.. No one knows if it works... There is also another concentrator that is owned by a couple of converters locally that only produce a very small quantity of lithium.

Even if the old converter sitting idle can be brought back to life it might be lucky to achieve a 55% to 60% recovery, though I was told that its likely to be closer to around 45%

What this means is that any DSO even if it can be converted is not going to make a pin prick difference to the global demand of lithium. - One person told me it is a waste of time, and has a great deal of environmental issues attached.

Those converters are located a long way inland so the cost to transport is US$50 per tonne. Thats on top of the US$50 per tonne just to get it into China..

It takes around 70 tonnes to get down to around 8 tonnes... which is the general production tonnage required for 1 tonne of lithium carbonate, but the problem they will have is, recovery from go being anything more than 50% or so, and then having to pay to transport that on to the converter.. probably another US$50 per tonne.

Transport costs per tonne of lithium from DSO are working out to be US7,000 to get on the ship and to the concentrator... then a further US$400 to get it to the converter.. costing a total of US$7,400 per tonne, provided the converter is capable or producing a final battery grade of lithium from the whole process..

Doubts have been raised..

My thought of DSO was that the Chinese were building concentrators to take the profit away from the miners and bring it their way, but for now I have been told, and also resonates in a recent tweet by Joe Lowry that the DSO is just sitting there trying to work out WTF to do with it.

The other problems that these potential converters have identified is that they have all this garbage left over.. some of which they can extract other 'nutrients' but over all, they know it isnt going to make them a hell of a lot of profit even with lithium prices up around US$16,000 per tonne.

The cost to dispose of all the 'excess product' is another concern they are working out..

DSO is this gift that keeps on giving... Comedy of errors... Abbot and Costello.. crossed with a bit of Dumb & Dumber.

The other problem... There is a lack of knowledge how to convert it... Remembering that there is as far as I have found out only 1 concentrator operating for a small sum. and the other one has been shut down for a long time.

Gee Australia... thanks for bringing your dirt and all but WTF are we gunna do with it?? LOL

Maybe the DSO will stop at some point... or maybe the Chinese will find a way to build their own converters.. It's unknown.. but the time it took to get Mt Marion and Mt Cattlin up and running with the latter being built before further adjustments required took extra time.

For now... it is.. well Abbot and Costello... Dumb and Dumber... Hilarious!

It's unlikely that China will be able to make the DSO work for at least the next 2-3 years, and any company selling to them DSO is cutting their nose off despite their face.

So above I pointed out that the cost for DSO was US$7400 per tonne of final product for transport alone..

There are other issues present which over time I will share... but for now... I have a Korean BBQ I need to clean and some calls to make...

I hope my little post was informative and sounds good when I read it in the morning

Soju out!