PLL General Discussion, page-2436

I wonder, and I hope not (but I was on the money with my call on Livent merging as "equal" with Allkem before that occurred as the "synergy" in Quebec was too good to pass up) if the newly merged Arcadium finds PLL to attractive to pass up.

The synergy in North America is too good to pass up. The hardest yards have been done. NAL has been restarted. CLP now has its NC state mine permit (the remaining wont be easy but I think it will be downhill (slowly) from here). Ghana permitting on tracking. TLP permitted (but PLL needs "bulk" to do both simultaneously and have said they wont do that). ALB has enough with Kings Mountain mine and SC MegaFlex facility and its position in Patriot.

Puts Arcadium as dominant hardrock miner in Quebec (50% of NAL production) + Whabouchi + James Bay
Puts Arcadium (almost) equal to ALB in hardrock in USA (assumes Ewoyaa SC sent to USA)
Puts Arcadium as roughly equal to ALB in Hydroxide production (Nemaska + CLP +TLP (eventually))
Strong cash flow from long term contracts (plus low cost Carbonate from SA) and great corporate connections. You only have to look athe most recent Qtrly to confirm that.
"... we have multi-year agreements, all with pricing floors, with a select group of core customers on roughly two-thirds of our total hydroxide volumes. In addition to pricing floors, there are also firm annual volume commitments over the life of the agreements."

The timing might be a little early given they are still digesting the merger and counter-intuitive given they are actually slowing their expansion (they have Capex project of $1.6B for FY24-FY26) - but then aren't we all given present market conditions, HOWEVER opportunity wise it might be just too good to pass up.


While I'm on Arcadium I'll note their pricing on Mt Cattlin and some other pertinent commentary
"We achieved average realized pricing of ~$920 per dry metric ton on a SC6 equivalent basis, which is up versus Q4 but still down meaningfully versus the rest of 2023. The cash operating cost of production at Mount Cattlin in the quarter was just under $700 per metric ton"
as compared to PLL's avg realized price of NAL $865 (SC5.5) so ~$960 on SC6 equivalent basis ... not to bad huh.

Now we've also heard KP talk of prepays on OTA ... Citi analyst on Q1 call posed the question

"Kate McCutcheon: ... Funding for your $1.6 billion over the next few years ... are you still looking at being able to do a prepayment deal there .... Is the appetite still there from the OEMs to do that? ..."

"Paul Graves: ... customers have a different view depending on two primary variables. Variable number one is what do they need, and variable number two is where is it. So, if it’s IRA-qualified lithium hydroxide, then yes, there’s appetite for prepayments, for long-term commitments, for, really, frankly, structures that look very much like the ones we have in place today. If it’s not IRA-qualified and it’s — whether it’s spodumene or carbonate, far less interest in customer funding, whether it’s prepayments or other approaches.... "

OTA Prepayments is of course just one source of capital - there are many others (such as grants, loans (low cost Gov't), forgiveable loans etc.)

Earlier the very first question asked of PG was this by TD Cowan analyst:

"David Deckelbaum: ... is the intention right now to be a sort of specs spodumene seller into the market or what are your plans to vertically integrate that asset vis-a-vis Bécancour or working with a third party?"

"Paul Graves: ... our business model is to be in the lithium carbonate and hydroxide and other specialty lithium salts business, not so much to be in the spodumene business ... the plan is absolutely to integrate James Bay downstream in the future. We’re looking at Bécancour as a location. We’re looking at building potentially in Bessemer City, where we have existing operations. And we’re looking at other third-party locations, including potentially other parts of Canada ... we’re increasingly seeing certain parts of North America being willing to provide incentives, financing incentive, tax incentives to encourage us to build hydroxide capability in different parts of North America..."


So pretty interesting and that closing bit is clearly referencing ALB and PLL initiatives.

Makes me think, PLL is a nice - but aggressive - fit for Arcadium to strike opportunistically. Even more interesting would be as part of that for them to buy-out SYA from SYQ giving Arcadium all of NAL.

2024 Catalyst - slide of PLL earnings call preso



"Evaluate consolidation opportunities" ... well I would suggest our capital is precious and we would unlikely be the consolidator ... so that would make us the consolidatee ... hmmm.