Conversion = confusion?Many in the market seem to think that...

Conversion = confusion?
Many in the market seem to think that Indonesia converting class 2 to class 1 means more nickel overall.
It doesn’t.

https://www.mining.com/beyond-2024-nickel-prices-to-increase-steadily-to-2028-fitch/

Less class 2 just means less class 2, it doesn’t mean the underlying demand for that has disappeared. Underlying demand which is actually the foundation of the entire nickel market ( stainless steel etc ), including pricing.

As we saw recently with BASF cancelling its multi billion dollar investment in Indonesia the world is bifurcating whether analysts/investors believe/like it or not.

The nickel that would have come from that plan now needs to come from somewhere else- somewhere that’s palatable to Western backers.

What a difference a single year makes!
January 2023 = Let’s go! Take our money!

https://www.mining.com/web/basf-eramet-to-finalize-2-6bn-partnership-on-indonesia-nickel-smelter/

June 2024 = We’re outta here!

https://www.mining.com/web/eramet-basf-cancel-plan-to-invest-2-6-billion-in-refining-complex-in-indonesia/

Why does any of this matter to ARL? It matters because our projected production is relying on a source that’s about as attractive to Western investors, consumers & governments as it can get.

Investors? A share price that will need to quadruple- at least- to reach even 1/4 of the NPV based on the current number of shares on issue.

Consumers? First world best practice extraction, processing & rehab.

Governments? Australia is involved in multiple multinational alliances & agreements from intelligence/military alliancss with the U.S., Japan, UK & others- then we have free trade/trade agreements with those above plus the EU.

Nickel isn’t popular at the moment & retail investors like to follow the crowd- being sure to make as little profit as possible. Meanwhile all the big names in investing love stocks/sectors that are out of vogue. They do a really weird thing- buying when prices are low.

Maybe that’s why they make so much more money than the retail investor?

The reason the deeper pockets that buy when prices are low aren’t here yet is because our market cap is under USD $100,000,000. It’s below their threshold.

Even Warren Buffett has said many times that he could make bigger gains if he had less money to spend with lines like ‘50% a year on $1,000,000 isn’t that hard’ while his company does around 20% per annum.

Oh well. I guess all the ‘smart’ retail investors are off learning how to get their pockets cleaned out by the banks etc that have now moved in on cryptocurrency!

’To the moon!’ …. until Blackrock & Medallion etc switch on their systems. Soon the retailers will be saying ‘please regulate the market!’ & the whole thing will become just another washing machine.