A sickening display in the AFR today as politicians strut and journalists solemnly intone about Critical Minerals and trusted supply chains.
All gesture toward value add, downstream processing and 'manufacturing' - as though these are superior paths to what Australia currently does.
They are not.
The big money - and all the price up-side - is in mining ore and concentrating it for transport.
Yes, there is a manufacturers' margin in smelting concentrate to metal. But that is all. Any smelter doing better is immediately confronted with fresh rivals ready to compete the excess profits away.
The miners will tell you every instinct, every fibre in their bodies directs them to swim upstream and toward the lowest quartile.
The only reason ILU is developing its Eneabba REE processor is because the government is paying for it with a massive $1.2 billion non-recourse loan.
And the product is still a concentrate to be shipped to China for refining into metal.
TO'L & team are putting up tailings and $US200m. They are accepting no downside.
Australia has high wages and first-world environmental standards. This is good. Yet it makes smelting metal here uncompetitive, even if we are able to get energy costs right down.
Change my mind.
Ash
ILU Price at posting:
$11.60 Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)