Let me make this simple for you. PLS have a pricing formula that they agreed to. GXY not have the same strict formula. It is a negotiated price between Galaxy and each client.
This year there was even a deal made between Galaxy and clients to move from 12 month to 6 month contracts, with the presumption that, as the converter upgrades completed that the bottlenecks would be removed.
All of this is on record and been discussed by Anthony Tse conference calls etc. The PLS pricing mechanism/formula has not been explained - but like any formula - is open to being gamed. That is how Soros became a billionaire. My point about the Chinese deal making is simply that without local knowledge and limited knowledge of the lithium market and spodumene industry that PLS have possibly signed onto a price formula that is doing them any favours. Galaxy has outperformed them in pricing and profit.
Why was/is it different for Galaxy? Galaxy have been in the conversion business before. They built and operated one. They know the margins, the operational problems. They have converter blue prints in the desk. They know what product is necessary and how to help the converters better process their ore profile. None of this experience was available at PLS. Nobody in their management had ever dealt with the product before.
For Galaxy and its clients there is a partnership there and an understanding between both parties about how to make it work. The mention of Galaxy buying into a converter is most probably an offer from one of their clients. With part ownership will come permanence and extra profitability from every ton processed.
As another example of the good will, Galaxy was never pinged (contract-wise) when it was late with its first shipment.
That is what I was joking around with the Chinese connections. You can't beat having some history and understanding between business partners and the Chinese take customs and procedure very seriously. Galaxy have had some of the same clients for 10 years. If you look at the history of their contracts then they have always out-performed the others. Galaxy got advance payments for Mt Cattlin start up. No other company got these and instead signed onto onerous debt provisions.
