LRS General Discussion, page-16046

Credit Bigbridjonny65

Dwayne Sparkes

@sparkes_dwayne

A couple of days have passed now and I’ve slowly recovered from reading the GS supply table. Some more ramblings on the current lithium market whilst I sip my morning coffee (managed to get this one down).Following on from my previous post regarding lepidolite production within China. The Chinese have shown that they are willing to mine spodumene at a near loss. It seems they aren’t too bothered about losses at the mining stage if it means greater control over the market. Alita with the whole Bald Hill mine debacle, were allegedly selling Spod concentrate from Bald Hill well below the current market price (70% under) to their Chinese offtake partner… See screenshotted article below.So why is China suppressing the price with low grade internal sources? I believe Its to bide time to build stakes in overseas, high quality lithium plays, predominantly Africa given the Australians and Canadians aren’t willing to play ball. Chris and Gina are well aware of this, and its most likely they are aware that the lepidolite reserves are a short term band-aid solution.As per my last post, you need roughly 84 tonnes of lepidolite ore to make 1 tonne of LCE. The contained lithium content of these low grade lepidolite mines is miniscule. The numbers below speak for themselves.‘414 Mine’ has 130Mt @ 0.38% li2O. Contained lithium = 0.0038 x 130Mt = 0.494 Mt li2O. That’s roughly 1.22Mt of LCE.Compare that to Kathleen Valley. 156 Mt @ 1.4%.Contained lithium = 0.014 * 156Mt = 2.184 Mt li20. That’s roughly 5.4Mt of LCESo the ‘414 Mine’ is around 20% of Kathleen Valley in terms of contained lithium…Also its not just about size, its how quickly can you get it out of the ground. $LTR for example is going to be a 4mtpa operation for 700,000kta SC6. You’ll need a 14.7mtpa operation to get the equivalent output from lepidolite grading 0.38% (414 Mine grade). And that's just the initial beneficiation stage...What we are seeing now is very similar to what happened with Iron ore. The Chinese attempted to use low quality, internal iron ore in order to manipulate the price. This turned out to be unsustainable and the price of Iron ore increased overtime.I believe we are seeing this again with in the form of Lepidolite. Its almost déjà vu in fact, the iron ore price plummeted 70-75% to a low of $37 a tonne in Dec 2015. Goldman Sachs' predicted the iron ore price to touch $35 a tonne in 2017 & 2018. The opposite happened and the price went ballistic. See chart below.Happy Friday everyone and cheers for reading.