Tend to agree with you that COVID-19 will lead to countries diversifying manufacturing activities. I posted as such in this AVZ Post #: 44000344 and in the Politics Thread - Post #: 44186292
Energy is one of the largest costs in the production process for hydroxide, not labour and Australia itself exports large volumes of 'energy' to China. To produce 1 tonne of hydroxide requires 10 MWh to 14 MWh of power. I went through these calcs in this post in another lithium stock although the calcs are related to power requirements in general using published hydroxide studies (Post #: 40107095) That is a lot of power is required to produce hydroxide - a typical household in Australia consumes annually 7000 kWh electricity, refer: https://electricitywizard.com.au/electricity/electricity-cost/how-much-does-electricity-cost/ . 1 What does 1 tonne of hydroxide give you so you get a guage as to what it is: depending on battery size only 17 to 25 EVs. Obviously the calcs could be lower but energy is actually the largest opex cost in making hydroxide, from recollection.
Look, it does boil down to supply and demand and without hashing old ground the relevant numbers are in this post and embedded posts, and if 2000 GWh is achieved teh supply gap will be enormous so price will go up and new supply will be required - Post #: 44658559:
When demand takes off the shortage is what will drive prices up - it is how demand and supply works. It is why iron ore prices can rise significantly rise when there is a shortage, despite China been a major market. The other thing that is going to help is more hydroxide and carbonate facilities been built out of China - i.e. even WA is building them btw. How the Europeans react is going to be a key as well - diversifying away from Chinese supply I suspect in time.
The other thing of interest is this diplomatic 'split' between Oz and China - at best it is going to make the world understand that they need to internalise some of these production processes away from China in risk mitigation strategies (refer the above). Refer above.
Might be some short term pain for Australian producers if the tiff spills over into Australian lithium as well, and I just wonder whether that will be a consideration for the Chinese in how they deal with Manono (i.e. speed up development LOL). I hope not, in part, because I would like to see some European offtakes btw, combined with some Chinese offtakes for AVZ, but time will tell. Certainly might speed up the development of Simandou by the Chinese in the iron ore area btw, given China's threat of late to Australian iron ore exports as well, albeit with Brasil's problem's China will remain heavily reliant on Australian iron ore for a while, my guess.
I have been toying with how to respond, but ultimately decided you have an agenda and no response is warranted. The fact you don't understand that long term holders can sell and take profit along the way is enough for me to understand you have an agenda. If you are concerned about how I invest maybe have a read of when I free carried back in 2017, how the profit helped me a lot financially, and what my entry price was. As 1 in 100 exploration plays ever make it to mining risk/reward is an investors own choice, not yours, and if they rely on HC for investment advice they shouldn't be investing in the stock market - the same strategy I took into ADN btw.
Anyway, apologies to others for this but there is no point conversing any longer. Maybe if you did a financial analysis with your input variables then we can talk, but one liners with no research no longer cuts the mustard for me. From your avatar I can see your a pilot - so assume you have some numeracy skills to knock out a spreadsheet with NPV/IRR calcs (just like I did in LTR as a non-holder) so we can see exactly where you are coming from. It is a sharing forum so substance by research helps one understand ones view.
As a final thought, depending on whether you are negative or positive poster each side to the debate will think this picture applies to the other side LOL, hence the best thing is to remain neutral and make your own investment choices and style.
