Ultimately it is about demand, and the growth trajectory to 2000 GWh. If that growth trajectory line is not restored, AVZ's entry to market will be pushed out, full stop. Everything else in your post we have previously gone through. It is why everyone in the industry is currently in a world of pain from producers to pick your explorer and chart their price. Without going over old ground, I gave my view in these post around AVZ and timing to market
It is all about the spodumene price at the moment - DFS shows viability so it comes down to Offtakes - and for downstream converters also all about lithium carbonate and hydroxide prices (as many downstream converters are also in a world of pain as well. Post #: 44533979 Post #: 44534149 Post #: 44534449
Another way to put it, Tianqi is likely to need to sell a major stake in the most profitable lithium mine in the world - Greenbushes. Why, check out its debt and issues around price for its downstream chemicals, and obviously that disaster of a purchase of 24% stake in SQM (prior to water issues emerging there).
Then we have Albermale - ditto. Paid a fortune for a stake in Wodgina, only to put it in care and maintenance. WES purchase of KDR now looks over priced given the deferral in the project since that purchase.
Then we have PLS, who modelled a DFS on 77.5% recovery rate and low opex cost, and remarkedly had an ok price assumption attached to it of US$550 per tonne. Unfortunately as we all know, it wasn't able to hit recovery rates, achieve its DFS costs and now prices are below the DFS assumption, so problem worse. Will be interesting whether the latest capex spends have sorted out the cost and recovery issues etc.
AVZ is not alone is my point. It is what happens when the market turns is my point, and it is the market turn that will determine the change in sentiment in the sector. At the end of the day, there is scope for a number of entrants to market when demand for EVs takes off, and that remains the key.
I'll just repost the table I post continually on what 2000 GWh means in lithium input needs and let others decide how many new greenfield entrants are required for the extra demand, with further info in this post Post #: 44607623. Especially noting that unless water issues in Atacama are not addressed, well expanding existing capacity there will be problematic.
And returning to teh old chestnut DRC, be mindful it producers gold and copper (Ivanhoe especially the latter). Thos industries are still there and Ivanhoe isnusing same proposed route as AVZ btw. Cobalt is till produced in DRC, but some mines are shutting because of price, just like price is impacting some companies operating in Australia. Refer: Post #: 43500526
Enjoy your day and time will tell. All this debate is irrelevant,if spodumene prices don't improve, and if they don't improve it essentially means the EV forecasts are not coming through, and obviously a lot of current producers are going to go to the wall, whilst explorers such as AVZ and LTR will have their ambitions to market pushed back (with obvious SP impacts on all companies operating in this space).
And as to your last paragrapah, in this side of the market free carry strategies are a key. Over the years there has been plenty of opportunity IMO for people to have done that. If they haven't then they have a different risk profile, and obviously by the looks of your comments a risk profile in line with 'risk it all'. For those free carried, like me, yes it would be nice to have been nostradaumus, like even investors in AJM and PLS would have hoped to be, by selling up everything in 2017 and then repurchase later in March 2020, forecasting COVID-19 as Nostradamaus would have been able to do back in 2017 LOL, but we are not and therefore it is how you manage risk that ultimately count.
AVZ will get to mining, it is just a question of when IMO, and that boils down to demand and supply. Finally, posters in AVZ are pretty level headed IMO - visit LTR where some people thereare quoting potential $1 billion TO price in a few months time (i.e. over 5 times current market cap).
