Phoenix Water - PXW - Lithium - 100x, page-718

From former Pilbara MD on lithium price and the second section makes you wonder how much demand there may be for what Phoenix is offering.

https://unauthorised investment advice/resources/the-shape-of-lithium-to-come-ken-brinsden-plays-free-jazz-on-next-10-years-of-lithium/

Lithium prices are at a new floor

Lithium prices have pulled back in China as of late, but in the mid-US$30,000/t range for lithium hydroxide and carbonate, are a multitude higher than their lows a little over three years ago.

Brinsden says the desperation to secure tonnes by converters has inspired high cost operations to proliferate.

Similar to iron ore, Brinsden’s training ground at the helm of Atlas Iron, it means the cost curve will never be what it once was.

“The floor price [has been reached] in the sense that it’s materially stepped up from historical norms because the industry has gone through a pretty significant change in the last two or three years to support demand especially from China,” he said.

“Some really unusual products have come to market that are very, very expensive. Think of it this way… Is it realistic that the iron ore market would be just Yandi mine delivering to China at $27 a tonne? Of course not.

“To support demand into China, a whole heap of other stuff has come to market that’s nothing like $27 a tonne. So the iron ore price really struggles to fall below US$100/t.

“Well exactly the same phenomenon is underway in the lithium world. It’s no longer an industry with just Greenbushes or the Atacama. It’s everything else that’s come into the market to support demand at nothing like those costs of historical industry in the lithium world when it was a bit more boutique.

“And as a result pricing is going to be strong. That’s my personal view. And would I worry about US$35,000 a tonne? Absolutely not.”

Is Phoenix providing the solution for some of the big boys that are thinking they have missed the boat?

The big boys will have to get into lithium

So far only Rio Tinto (ASX:RIO) has moved into lithium in any substantial way, but even it sees the prospect of buying assets a nervous business with the post-boom valuations of lithium producers, developers and explorers.

BHP (ASX:BHP), Glencore, Teck and more like old world commodities like nickel and copper to play the energy transition.

Brinsden says they’ve missed the boat, but sees the giants coming eventually into the fold.

“The big guys haven’t acted. Yet. Not materially.

“So the critical minerals sphere has been the domain of the juniors and the mid-tiers and it’s been hard. But so far, now, a happy hunting ground. The big guys must be looking at what’s happening in the industry today and go oh geez we missed it, it’s a shame.

“But they will participate, it’s just a matter of time. And they’ll be compelled to because eventually their shareholders will say hang on, how did you guys miss this? Pilbara is making 800 million bucks a quarter. Your mines don’t make that. What are you gonna do about it?

“You can imagine those sorts of conversations unfolding. They’ve missed a trick. They’ve missed the significance of the scale in the industry.

“And I might say, eventually, their employees will be demanding change from the inside of their businesses. Imagine how hard it is for a coal company to recruit a young professional now. Well, I don’t want to say that iron ore is quite there yet but could it be in 5-7 years’ time? Absolutely.”