Firstly Happy Australia Day to all.
To our story- As Rick Rule says, ‘You’re either a contrarian or a victim’. Our sector is down now & so this is when the contrarian moves in.
To gc2016’s picture- Probably the only junior boss who would have had people wanting to talk to him, as opposed to a junior trying to get the attention of bigger players.
A newer reader might ask why?
7th largest resource in the world. Elsewhere we can find that Ardea holds the biggest reserve in what we might call the ESG/IRA world.
Sumitomo/Mitsubishi executives can now say one thing for sure- taxes/royalties etc in Oz won’t be going up & may in fact soften in the short term ( 5 year timeframe ). That’s great for Ardea, especially when they see we are welcome in the group that includes the big boys & talks to directly to government.
To the world outside Oz- Readers can enjoy searching for stories about the Indonesian nickel sector & sadly the only thing to boast about there is the output. Costs there are most likely now on the rise.
A note that caught my eye from a new article & is where the opening quote came from which is worth repeating-
’Focus on beaten down stocks. You’re either a contrarian or a victim.’ It’s one of the mantras that has helped me live by investing alone for close to a decade now after starting out as a part timer back in 97’
https://www.mining.com/a-roadmap-for-green-metals-in-2024/We also see in there just how lithium has come back to earth, even though prices are still high compared to just 6 or so years ago. People talk about nickel coming down by 40~% last year? Lithium came down by around 80%
The important thing there? Nickel hadn’t risen as high & therefore wasn’t coming down from as high a high & over all ( forgetting the spikes ), has been trending upwards for a decade or so.
That means the Li in a high energy density nickel based battery is now much , much less of a price concern for manufacturers. Make no mistake- that itself was part of the motivation to produce LFP batteries as every component material’s price is an issue.
The key with Li is that pricing is still high enough to keep production flowing. Why? Because it’s not far off the prices that spurred the 2016 development boom & the bigger players are still making money. That view comes in part from having direct contact with Joe Lowry some years ( Galaxy days ), ago & ongoing contact with the person he probably speaks most regularly to here in Oz, who is also in direct contact with others in the industry.
The crux investor video Rewop kindly shared the other day shows the first analyst noting the surplus forecast in the second half of last year is of course under threat by recent closures/slowing down of high cost ( which Ardea is not ), nickel operations. Surprise, surprise- the Ni price looks to be stabilising.
Of course we all saw the first cracks in the Indo story with Ni ore being quietly imported from the Phillipines.
Sumitomo is in the Phillipines. They decided against investing in some Indonesian prospects in recent memory. Instead they have gone for looking at/investing in Canada & Oz, as we can enjoy reading about in the posts above this one.
Oh well. We can all enjoy a weekend of research as we Aussies enjoy an extra day off from the market, with some of us probably grateful for a laugh at the idea that the ‘language here is changing’ even though at least one poster has- for years now- urged readers to remember that the steel industry is still the biggest consumer of nickel. The focus of each poster hasn’t really changed much at all & nor has it from the company.
Batteries are the high growth story but thanks to stainless/alloy demand growing steadily from a larger base it will still be the key driver for years to come even if projects like ours wind up being taken by the battery people.
(20min delay)
