Hi everybody. First time on HotCopper. I have read your post for some time now and it has been interesting and educational - some of you really do your homework!
Anyway. This was my argument this morning after listening in on the lates Lithium podcast. Tell me if you think it holds water or if I am way off here:
I have been studying the Atacama situation and SQM and Albemarle in particular and something came before me.
Does it strike anybody else that this is old “technology” - this brine pumping and evaporation? It is steam engine stuff. What happens afterwards in the refinery, I am sure, is cutting edge matter, it has to be, or you loose your position as market leader.
But.
If Greenbushes or Kidman needs to fill a big order they just put another shift on, but brine evaporates as a set pace…and if it rains.....
Yes - you can spread out and clear more land but to look at their setup they are already putting enormous pressure on the aquafer and people are getting concerned.
According to Reuters they have maxed out their allocated water allowance by 6 times and people are starting to get seriously concerned - not just environmentalists and a few dusty Indians.
And STILL they cannot meet their targets! SQM are giving lofty promises of supplying the world with 200 000 tons to refined product but to date they just got a paltry quarter of that out the door.
During the next ten year the worlds yearly demand for refined Lithium will go from 44 000 tons to ten and possibly twenty times greater.
They would have to dig evap-pools all over the South Americans!!
There is no way they will be a continued to be a threat to hard rock lithium which - to me - is the future.
Furthermore - the Reuters report almost guaranteed that nearly ALL junior lithium wannabees will either fold or be taken over by the big boys - Kidman and Greenbushes and the like.
Because of the cost of building a refinery.
Because if SQM have problem’s, with their expertise and funding capability, what chance does a penny dreadful have?
So i hope Kidman has any sense to build their refinery 50% larger than they will need for their own produce and then tell to everybody who comes knocking that; Yes, we will gladly refine your stuff but we will take a 50% cut!
Along those lines.
KDR Price at posting:
$1.06 Sentiment: Buy Disclosure: Held
