The ALB mob really aren't very good at hard rock mining, and I...

The ALB mob really aren't very good at hard rock mining, and I was surprised that they went all-in for ALB, because their (relatively successful) MO, in Australia, at least, has been to take a 50% or 51% position in hard rock miners, not try to swallow the entire pie.

The fact is, ALB management haven't run a hard rock mine in decades (people seem to forget that ALB is a 100 year old chemical processor that also does a bang-up business in Bromine extraction and processing). They have some fairly extensive experience, recently, with brine extraction, and they are a chemical company with plenty of process/refining experience, but not hard rock mining. When you look at Greenbushes, Wodgina and other related hard rock mines they've taken positions in, ALB acts as the "money men," but let their partners (like IGO) run the mines.

If ALB had any brains, they'd have tried to create a new corporate entity, offered to put in a substantial chunk of cash to make sure LTR could go mining, and used the same basic formula as they did with Greenbushes, whereby LTR still exists a 49/50/51% partner (that would be where they haggle). They could also have negotiated an offtake agreement to feed their plant at Kemerton, which is likely the entire reasoning for their KV infatuation. LTR would continue to exist as a stand alone that can collect dividends from the new corporate entity running KV (like IGO, at Greenbushes) and use that income for dividends to shareholders and to fund other potential projects.

ALB could have easily spun the above scenario as "we're providing the capital needed and an OTA, and now we can all go mining," but their greed has ruined the opportunity. Now, unless they manage to bring this deal across the finish line, which seems HIGHLY unlikely, they either have to hope for another deal to allow them to up their offer or they need to go away for several (I've read both four and six) months. Either scenario costs more, involves delays, and is just generally bad business. The partnership approach would likely have kept big bad Gina away, as well, since it would have been an American/Australian partnership, rather than Americans taking-over a prize Australian asset.

It does beggar belief that a firm with this much experience as ALB, including some success in Australia (they do own half of Greenbushes and Wodgina), could read the tea leaves so poorly in this situation.

Have a good Tuesday