@pastperformer, Depends on how bearish on lithium price you want to be, which none of us can predict well, myself included. If it keeps dropping to be near the predicted long running price assumptions then a lot of the earnings growth that would otherwise occur by expansion appears to be taken up from that.
I will completely agree that your numbers are perfectly reasonable assumptions if everything goes reasonably well. They are readily achievable from 2026 onwards after SDV ramp up occurs in CY25-26 and hopefully James Bay has entered production. I should have said next two years instead of few years.
Whilst it’s possible for AKE to be in a position to meet growth targets organically, I still argue that the merger pretty much guarantees it. Anyway, whether the vote gets up or not, I’m adding all the AKE shares I can at these prices. I’m utterly convinced that brine is the future of lithium, like it often used to be, and I can’t see any scenario where AKE isn’t hugely profitable.
@akg. You’re correct, there’s not firm evidence and it’s just pure speculation. However, the many reports of Africa ramp up and fact that lepidolite was being processed at all says a lot. Lepidolite is so environmentally unfriendly compared to spod, which has its own issues and is no saint itself. In no rational world would lepidolite ever be processed, yet it was. The cost of production thesis would also suggest that Greenbushes would be the last Spod mine to threaten production cuts, yet here we are.
Rational analysis is unfortunately only part of the story; I don’t think we are in an era where we can discount the possibility of geopolitical plays that take advantage of our reactionary Western governments. Feel free to disagree completely, but by the time any firm evidence rolls around the damage will already have been done. Also Remember, new Chinese lithium investments are pretty much impossible in Australia and Canada. They really have nothing to lose. Lithium at prices that disrupts new investment in Spod mines will in future hurt Western car makers that don’t have future supply locked up far worse than the Chinese companies that do.
Great insightful discussion!
