LRS General Discussion, page-16545

While one can take the contents of this article based on Benchmark content in ST.ock/H.e.ad with a grain of salt or not it suggests that the demand of industry leading or good ESG practices is set to meet only 45% of demand by 2026 but drop to 35% by 2030. I am always dubious of projections more than 1 year into the future as they tend to be wrong and significantly so.

If LRS follow Sigma and replicates its green/ESG credentials then LRS will be in a good position to achieve a premium price for its lithium. Maybe the price premium will be even more than the 9% that Sigma recently achieved in future years. The premium Sigma achieves is something to watch closely.

If LRS achieve such credentials then, compared to all other Australian listed lithium producers/developers it may put them in a possible unique position when it is producing in 2026. The results would be a a bigger profit and a premium SP (in theory).

I wonder if this has been factored into the current LRS SP by investors?

This possibility is a key reason I like LRS compared to any other lithium stocks listed on the ASX. If I was LRS I would be making a big deal about this and include details in the DFS.

The sustainability supply-demand spin

Benchmark also throws an interesting metric into on the supply-demand sandwich – sustainability.

“Although a near-term surplus of lithium is forecast until 2029, there is a growing desire from automakers and consumers for lithium sourced sustainably,” notes the firm, adding:

“Benchmark’s Lithium Sustainability Index shows there is currently insufficient supply of lithium from companies with good environmental, social and governance (ESG) practices to meet demand now and in the future.”

“The question of provenance becomes the most important question of them all,” Cameron Perks, principal analyst for lithium at Benchmark, said during a Benchmark webinar last week.

Hmm, is this a reach?

Perhaps not when you consider the fact sustainability and ESG is a big, growing factor that’s driving many a commercial-based decision these days.

“The sourcing strategies, particularly for OEMs, is that they’re looking for industry leading, good practice companies to fulfil their lithium requirements in order to fulfil, say, decarbonisation goals, not just for the company, but for the country they’re operating in,” Perks said.

That’s all well and good, but Benchmark reckons the supply of such lithium is limited, noting that by 2026, lithium from recycled sources or mined by companies with industry leading or good ESG practices is set to meet 45% of demand but drop to 35% by 2030.

Lithium, EVs, clean energy, sustainability… guess it all ties in, doesn’t it, giving some validity to this angle.