RIO is funny. But their stupidity is our good fortune.
I am talking about RIO for along time that RIO has to buy a hard rock resource but nothing else. I have posted what RIO had to do more than 3.5 years ago. See my below posts.
Same for ALB and WES. I talked about them many many times.
But anyway their stupidity is our good fortune. Now they are all complaining that LTR is too expensive. It will be much more expensive my dear CEO guys..! You just wait and watch.
RIO has no intention to develop its Jadar project which contains huge amount of lithium in the borite ore. Another hopeless project for lithium extraction. Uneconomic.
That's why we know from some sources that RIO is still interested in lithium business.
Barry Fitzgerald's opinion (MiningNews.net, May 8) "Rio was also widely reported to have been the under-bidderin last year's sale by Canadian fertiliser company Nutrien of a24% stake in SQM to China's Tianqi Lithium for US$4.06 billion.
And it is known to have all the info it wanted from the Kidman data room before it was closed due to the agreed bid by Wesfarmers."
I don't know if RIO is still in the game. I would never expect Wesfarmers would be a lithium miner and producer. RIO is miner. It's probable that they are still in the game. We will see.
Every major is looking to buy spodumene based hard rock resource but nothing else.
Jadar deposit is a borite deposit which contains lithium. It was discovered in 2004 but it is still sitting there. Even RIO is not sure "IF" they will develop it. See this is from RIO's mouth;
"Due to its high lithium and boron concentrations Jadar has been ranked as one of the largest lithium deposits in the world.If developed, it has the potential to supply a significant percentage of global demand for lithium".
In May 2018 RIO was still checking it's viability; (Click here) "Rio Tinto is continuing to assess the viability of the Jadar lithium-borate project in Serbia, which already hits a number of key criteria for approval, a senior executive at Rio Tinto told Metal Bulletin".
...I know Jadar project very well. It's an uneconomical project at the current market situations and mining conditions.
RIO is in Serbia for that since 2001. RIO discovered it in 2004 and is playing with it since then. Drilling, drilling and drilling. Still drilling. No met work is done yet. LOL... They are just holding that resource for the future. Maybe something happens and they can start production. Hopeless for now.
The mineralisation is jadarite which is called lithium borate. Irregular ore bodies under the ground, kind of lenses, at depths of 100m to 750m (up to 1000m). Jadarite is nothing like spodumene based hard rock resource.
The main zone is Lower Jadarite zone at depths around 700m. Needs total underground mining however it looks in current conditions. The main mineral is borate but not lithium. Lithium would be a by product. 125mt 1.8% L2O with 1.2% cut-off grade means it's uneconomical.
They even can't mine the borate because the largest and very high grade borite resources in Turkey (72% of world resources) and they mine it by open cut mining there. RIO can't compete with it either.
I think this is enough to understand why the Jadar Project is not taken seriously in the lithium space by the majors, and why RIO is trying to buy a hard rock resource now. My Post #:45090218(June 2020)
...I know Jadar project very well. It's an uneconomical project at the current market situations and mining conditions.
RIO is in Sirbia for that since 2001. RIO discovered it in 2004 and is playing with it since then. Drilling, drilling and drilling. Still drilling. No met work is done yet. LOL... They are just holding that resource for the future. Maybe something happens and they can start production. Hopeless for now.
The mineralisation is jadarite which is called lithium borate. Irregular ore bodies under the ground, kind of lenses, at depths of 100m to 750m (up to 1000m). Jadarite is nothing like spodumene based hard rock resource.
The main zone is Lower Jadarite zone at depths around 700m. Needs total underground mining however it looks in current conditions. The main mineral is borate but not lithium. Lithium would be a by product. 125mt 1.8% L2O with 1.2% cut-off grade means it's uneconomical.
They even can't mine the borate because the largest and very high grade borite resources in Turkey (72% of world resources) and they mine it by open cut mining there. RIO can't compete with it either.
I think this is enough to understand why the Jadar Project is not taken seriously in the lithium space by the majors, and why RIO is trying to buy a hard rock resource now.
I have given some information about RIO's Jadar Project before. I even don't consider it as a competing resource for LTR. It can not be mined in the current prices. If you read me posts below you will see that RIO was bidding other Tier-1 resources for buying but not developing Jadar Project.
US$ 2.4b makes AU$ 3.3b. This project is crap. Not economical. The deposit is around 700m deep. It's not lithium-borate project, it's borate lithium project. The main ore is borate. Lithium is secondary and hard to extract. RIO knows very well that they can't compete with borate resources (72% of the world reserves) on the surface held by a Turkish government public company.
See my detailed post about RIO's Jadar project here:Post #:49513165
So why is RIO making this BS?
....
August 17 2021 (3 weeks after RIO anns) "Woodside buys BHP's petroleum division" "BHP CEO Mike Henry, who also announced a$5.7-billion investmentin the Jansen potash project on Tuesday".
I can understand why NHP is dumping its oil business. The fossil fuel business. It's bad.
BHP has got rid of the oil business now. No fossil energy business in portfolio.
What about the “New Energy” and its minerals?
Btw, I know Jensen Potash Project in Canada very well. It;s crap. Uneconomic. I know it well because I was in a potash stock in 2011 when BHP made US$38b takeover bid to PotashCorp of Canada. I bought in a potash stock that time and made good money.
After spending USD500m into Jensen Project for exploration in Saskatchewan in Canada where PotashCorp is producing Potash (KCl), then they put a bid on PotashCorp. The PotashCorp didn’t sell itself to BHP. Then BHP threatened PotashCorp that they would start Jensen project, they gave the start (like RIO) a few times but the project has never been started. Then the 3 cartels of potash business (two of them were Russian connected) broken up from their monopoly agreement and started a war (they created a short supply by being cartels and reduced production). I was seeing it that there were no organic shortage. Anyway then the potash prices went down and no point of any new project including Jensen of BHP.
Now Jensen project is greenfield project. The potash market won't absorb it because there is no shortage in the horizon.
Its strange that both RIO and BHP are doing silly things with those loser projects (Jadar and Jensen). And now it seems to me that both RIO and BHP are misleading their share holders by their anns about those silly projects.
Now this is my imagination;
RIO said about a month ago they will bury (invest) AU$ 3.3b (US$2.4b) into Jadar LITIUM Project
Then BHP said they will bury $5.7b into Jensen project.
This looks like a bidding war LTR to me!!!
If LTR asks for $2.5 per share that makes $3.8b.
That is over what RIO is going to spend for Jadar ($3.3b)
Plus the cost of spod plant and integrated refinery: $1.1b$3.8b + $1.1b = $4.9b.
That is under what BHP is going to spend for Jensen ($5.7b).
RE: The article about RIO's lithium ambition and takeover thoughts
I don't give much credit to the article on The Australian for now.
We already know that there will major M&A activities in the lithium sector. Because the major hard rock projects are all in Australia, so the M&A will start in Australia.
We also know for long time that RIO is interested in lithium. I made some comments about RIO on my most #:61300316on May 9 2022;
"In relation to BHP's negative thoughts about lithium recently,I am now thinking that RIO might be after LTR.We know that BHP and RIO never bid on the same company head to head. BHP says they don't think lithium would have a 100 years of good run (they say 20-30 years. LOL), but we know RIO is very keen about lithium, they bid on couple of big projects, they unsuccessfully started to develop their own mine in Serbia (Jadar), but RIO has failed on all of them.RIO also has got the northern and western tenements around LTR's KV project... Anyway we will see what happens next".
We know the parties. The major one is RIO because BHP has already stated in many occasions that it's interested in nickel, copper, etc. They never said they were interested in lithium although it doesn't mean that BHP is not going to make a lithium project acquisition.
However RIO is the one who got tenements around LTR's KV project just recently (see below).
Yes, RIO can easily buy PLS or LTR, maybe both at the same time. They have a lot of cash. Money is not the issue. It's only the issue of RIO's board to make that decision. If they make it then bang, they buy it.., if they offer the right price though.
RIO have the capacity to write off billions dollars on projects, assets, debts and anything they don't like. RIO have already spent more than $500m on Jadar project in Serbia which is now a scrap. They don't care.
But they need to buy a big lithium project if their decision about having a considerable position in lithium sector is still solid.
And yes, there is only two asset RIO could buy in Australia which could comply with RIO's credentials, they are LTR's or PLS's projects.
So it's best to relax and wait and see what is coming up.
PS: RIO's tenements (taken recently) around LTR's KV project. (This is an old map I've made before. LTR took some more tenements at the location for water collection purposes). I can also add that RIO has put its ruler on LTR's assets and is doing something.
LTR Price at posting:
$2.85 Sentiment: Hold Disclosure: Held
(20min delay)
