It's all about risk calculation.
I'm only in lithium stocks for last 8 years since 2015.
A lots of people asked me a lot of lithium stocks along the way when I was only holding LTR. Some behaved badly to me as if I was their enemies when I wrote disadvantages of the stock they were holding.
They asked me AVZ, I said it's the best resource on earth but 90% high risk. (you know what it is now)
Some asked PLS, I have had geological, geochemical and technical problems with it on top of its managerial problems. (high iron content, underground water problems, digging ore from6 different pits, etc.)
They asked CXO which is very small, only consolidating multiple pegmatites around the area.
I only liked My Holland project of WES/SQM but WES was not a pure lithium play for me to get a good leverage. It's a bluechip. (I like it if it buys LTR and gives us WES shares
)
So there was nothing better than LTR.
When it comes to ALB and its Chilean project.
Of course ALB and SQM have big problem. That Atacama project were stolen from the people of Chile by the help of fascist Pinochet regime long time ago. Now they have to give it back when their "bloody contracts" are over.
See my post about Albemarle's history if you missed it:
Post #: 67107646SQM's contract will be over in 2030.
ALB's contract will be over in 2044
but... but but..
The thing is it's not the time limited it's the amount of lithium limited they can extract from Atacama.
ALB's remaining contract "Combined, as of the effective date of this TRS, August 31, 2021, Albemarle has a remaining quota of 340,170 t of LME, expiring January 1, 2044".
Lithium metal to lithium carbonate conversion factor is 5.3.
340kt x 5.3 = 1.8mt LCE
That means ALB can only extract 1.8mt lithium carbonate from Atacama until 2044.
It's still a lot though. It's LCE equivalent of 700kt production from a spod mine per year for 18 years...
unless this contract is terminated or restricted..!
That amount of lithium can be good for ALB but not good for the world demand. That's the key thing. The world will need 1mt of LCE this year (around 15m EVs). It was 700kt in 2022 for 10.5m EVs. So the world will consume 1.8mt LCE probably in 2024 only.
See here: "
ALB; SEC Technical Report Summary Pre-Feasibility Study Salar de Atacama Región II, ChileEffective Date: August 31, 2021Report Date: January 28, 2022"
"
Albemarle’s mineral rights at the Salar de Atacama in Chile consist of the right to extract lithium brine, pursuant to a long-term contract with the Chilean government, originally entered into in 1980 by Foote Minerals, a predecessor of Albemarle. (Given by the fascist Pinochet regime)
This contract has been subsequently amended and restated.Albemarle’s predecessor’s initial contract with the Chilean government will remain in effect until the date on which it has produced and sold 200,000 metric tonnes (t) of lithium metal equivalent (LME), although the lithium can be produced in any of its forms, from the Salar de Atacama.
As of August 31, 2021, the remaining amount of lithium from the initial contract equals approximately 78,038 t of LME.
On November 25, 2016, CORFO and Albemarle entered into an annex to the initial agreement adding an additional 262,132 t LME to the total quota and setting an expiry for production of the quota of January 1, 2044 (i.e., any remaining quota after this date will be forfeited).
As of August 31, 2021, the remaining amount of lithium from the second quota equals 262,132 t.
Combined, as of the effective date of this TRS, August 31, 2021, Albemarle has a remaining quota of 340,170 t of LME, expiring January 1, 2044."ALB has other problems at Atacama desert project. They don't pay well to the workers. And they go for strikes. See the last one here: "
Union at Albemarle Atacama plant rejects new contract offer, strike continues".
They were both bleeding badly yesterday night in the US market.
(20min delay)