Just to add to SF reply, the contracts aren’t renegotiated as such. What has happened is the existing contracts have a different pricing mechanism which takes into account more recent market pricing. I believe (my take) PLS had discussions with all their customers after the BMX auction results indicated that the current pricing formula wasn’t in the best interests of PLS or customers and therefore off take contracts going forward.
So pricing received now adjusts quicker to current market price. This will also work in reverse also if the Lithium price does start retracing, the contract price received will decrease quicker.
Ken did mention in a conference call, that all the customers were very amicable during these discussions.
Now I’m sure one of the discussion points was, for production expansion to occur, incentive pricing is required so it’s in the customers interest that this occurs.
Job done, this is now occurring.
Just to add to SF reply, the contracts aren’t renegotiated as...
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$3.30 |
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