For every action….
Newton could be right again
The general consensus on our forum regarding Kidman’sfuture is a positive one and after listening in on lithium podcasts around theworld this morning I think we could well be right.
“For every action there is an equal and oppositereaction”.
The overproduction hype a while ago had a detrimentaleffect on lithium companies across the board. It frightened away uninformed fledglinginvestors from the sector and it may have effected decision making in regardsto exploration. This was especially unfortunate for USA and Europe since both werealready caught flatfooted by China and slow to respond to the coming EVrevolution. That hype was the “ACTION”.Now it looks like the “OPPOSITE REACTION” is on the cards.
It has now become alarmingly - to the World -and thankfully - to us - clear that not only is there no overproduction tospeak of, but many of the biggest producers are actually failing to meet theirproduction targets. This is because their bread and butter method ofdoing so - brine based production - isproving uneconomical in comparison to the hard rock mining alternative - and thisis before we factor in problems with flooding and the depletion of Atacama’sgroundwater. Byramping it up and squeezing out a “premium” product - which added $2000 (USD) tothe production cost/ton- so they couldenter the same market as refined hard rock lithium produces they have blown out their costmargin.
The word is that current producers will notbe able to meet the world’s demand of lithium 2019 . What was news to mewas that on top of this apparently nowhere near enough new explorationis taking place and new mines established to pick up the slack.
So, in regards to the sudden price drop of Kidmans shares; picture this SpectacularHouse. You own this house. People are suddenly taking notice of your house. They want in. They bang on the door and shout through the letter chute but you have enoughmembers in the family already thank you very much. So the bargaining begins, thepleading and finally the threats. Nothing works. So in the end the Shorters break thedoor down by weakening its foundation. Now we have new family members in thehouse. They must be here for a reason. They know something we don’t. They know what is coming... .
