Greetings all, hope you had a lovely Christmas. I know I've had a lovely break!
@Star Boarder,
@maxi1981 and
@Thesi have hypothesised previously about LPD being involved in SdV. Maxi's post here shows some details of the patent:
https://hotcopper.com.au/threads/somethings-going-on.4345005/page-47?post_id=36133101It is possible that LPD is one of the 7 companies involved in the pitch, but I think it is extremely unlikely, and even more unlikely that LPD would be chosen.
The team can't bring funding to the project, they can only bring technical knowledge. None of them have operated a brine production facility before, so it there isn't even a huge wealth of technical knowledge to use. Unless there is a specific technical challenge with SdV's brine that only LPD's patent/team can solve, I don't see them being involved. Much more likely that it is either a partnership with an experienced brine operator, or a direct investment from a customer.
@sjmv, you're right about the potential conflict of interest issues with the Global Lithium podcast, and definitely that it is a marketing vehicle for him to raise his profile as a consultant in the industry. As such, I wouldn't get hung up on the his commentary about individual companies.
For example, I wouldn't say he has recently been critical of ORE's product; the fact that they have plenty of output that is not battery grade is publicly available information. It is also demonstrated in the historic price data for this year; SQM has been getting north of $16,000/t, while ORE has only been getting around $13,000/t. Their operations are not that far apart, so would attract similar pricing if they were at a similar quality.
In fact, his willingness to speak plainly about projects and the spin that accompanies them is one of things I value the most about the podcast. After all, he has been around long enough to hear all of the promises in the world, and see the failure to deliver so many times. It is refreshing to be able to hear stories of the promises that have been made in the past and learn how they went wrong and weren't delivered.
That being said, he has also been wrong on plenty of occasions. If you go back two years, he was largely dismissive of TAW, AJM and PLS being able to deliver their projects on time, if at all, and feeding supply into the market in 2018. That position completely flipped earlier in the year when he visited the projects and met with the companies, and all three are now operating mines and he is supportive of the companies.
He has said on a number of occasions that he is an SQM shareholder, and I suspect he has either worked for GXY or is a shareholder, or possibly both, but other than that the disclosures are pretty thin, as you say. Between that and the propensity to misjudge projects individually means that you should definitely take any comments about individual companies with a grain of salt, as with any investment opinion anyone gives you.
ORE, for example, may still be a good investment even if it doesn't produce 100% battery grade material yet. If the market is overly pessimistic of them, then you can still do perfectly well out of it.
But on the big issues, so far he has done pretty well as far as I'm concerned. They correctly called that the DSO from PLS and Wodgina wasn't going to make much of a difference to anything, that the South American producers would struggle to expand and that the oversupply story wouldn't pan out at all, which were all bang on. He has repeatedly stated that he thinks prices will stabilise in the $12k-$14k range, which they haven't, as SQM in Q3 reported prices above $16k.
They have also been saying for awhile that the shift to hydroxide isn't going to happen as quickly as has been anticipated, and that seems to have been a key point they wanted to make for 2019. That means more demand for carbonate in the short term, when carbonate supply is already stretched.
So yeah, don't hang off his every word and don't look for his approval or his recommendations when it comes to picking individual investments. But the context for the industry is excellent.
Happy new year, all!
Cheers
(20min delay)