1) Sustainable EV growth to scale comes at the expense of more affordable EVs, they don't depend exclusively on one of their components. It's the final consumer who will dictate the global adoption of EVs. Oil prices have increased for decades and that hasn't reduce car sales. How EV sales growth is attained is a decision of car sellers. They might want to maintain unprecedented gross margins as in last years, mostly caused by the supply chain crisis (this has also affected the ICE market). And they will try to do it, stressing the consumers' budget. But once the market becomes saturated and sales moderate, sellers will be forced to lower their prices. They will then try to reduce their costs at their suppliers side (more reasonable battery pricing) but the final solution will be more complicated and dictated by supply/demand and market share. Once one seller accepts to reduce its gross margin (which are at higher levels than before the pandemic) to catch more market share, the rest will be forced to do the same. That does not need to come at the expense of cheaper batteries as you claim. Actually, Tesla has been reducing their prices in many markets while lithium carbonate prices were still high (January 2023): https://www.reuters.com/business/autos-transportation/tesla-cuts-prices-electric-vehicles-us-market-2023-01-13/
2) The global supply market WOULD be different. OR NO. Who knows. And WHEN would it be different? You mention several projects that have announced their intentions years ago, yet most of them are but paper projects. What about Bacanora in Mexico? They published their DFS in January 2018 and they are still at pilot plant stage more than 6 years later. Which are those "few EU projects that would become big players"? Please, name them. By the way, WOULD the demand market be the same? Or WOULD the supply deficit increase despite that supply market? Most of you warn about bad expectations in the demand side, which will necessarily hamper development of new mines/projects. Supply and demand need to and tend to be balanced. You always place supply at very optimistic figures but demand at the opposite side. That does not work at any market, and demand deficit will stop all those nice projects you mention (no one will invest in them, neither Exxon).
3) You know nothing about ore deposits. Reserves quite often increase since initial studies released before coming into production. All mines continue exploration drilling at the deposit during production and many of them increase their reserves. Most of times it's just a confirmation of "inferred" resources, but they increase the estimated production and mine life, and improve financial figures.
4) DFS gives hypothetical figures and it's needed for a FID (Final Investment Decision). Once the project is at completion (commissioning in a few weeks) and to start production, a revised DFS has no sense. The FID has been done and executed. Now you have to be patient and wait for production and quarterly reports. As previouly stated, all but one Australian spodumene producers have been profitable despite lowest SC prices during Q4CY2023. So LTR has many chances of been profitable. BoD has been very professional and has taken the decission to invest a lot of money in a high-quality project. No one can deny this: the increase in CAPEX has been meditated and has a target. Therefore, it is very unlikely that opex will be over future SC prices once the ramp up has been completed.
LTR Price at posting:
$1.25 Sentiment: Hold Disclosure: Held
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