Understood, but the potassium drives a lot of the fertiliser products SQM make. So out of the brine they get:
1. Potassium Chloride (which is predominantly used to make potash).
2. Potassium nitrate by mixing the Potassium Choride with sodium nitrate, which basically is used as a form of gunpowder/fireworks and, moreso, in food preservation.
3. Potassium sulphate (again predominantly used as a fertiliser), which again uses Potassium Chloride and I think sulphur dioxide, oxygen and water to remove the 'chloride' effect because some crop types can't cope with chloride.
4. Boric acid - used in textile fibreglass mainly and, from my reading, LCD TVs.
5. Magnesium chloride - one use is de-icing roads ironically.
6. Obviously lithium for carbonate etc.
From link:
http://www.sqm.com/en-us/acercadesqm/recursosnaturales/procesodeproduccion/salarbrines.aspx
So whilst I generalised use, because the predominant base is potassium cholride (main use is for potash) or leveraging of that base to produce other fertiliser type products. That is there are linkages in prices to the base (potash) product IMO, and obviously because the other fertilisers are better products they get higher prices. So point still stands that too much brine means you have way too much potassium and therefore your issue remains around whether your agricultural markets can take it without crashing those markets. The point is most brine deposits have 10- 15 units of potassium to each unit of lithium.
Potassium cholride is essentially your base product for the Ag sector commodities produced from brine, which because it would mainly be used for potash I suspect the subsequent products produced are linked in part - i.e. if your base cost reduces because of over-production (potassium chloride) then all your subsequent product prices as input costs either reduce (if sell to third parties just the inputs and/or you have issues around storage if products cannot be sold or absorbed into the market because of over production of potassium chloride which impacts project economics).
Or another way to put it, if the market cannot accommodate the increased products produced by potassium then this could reduce the benefits derived from an increasing lithium price for brine producers. Currently with hard rock, the market can accommodate not only the lithium but any tin and tantulum that is derived from hard rock (which is a better place to be in IMO).
Anyway, speculatative and hypothetical but written IMO and others need to DYOR. As I said this post is not focussed on AVZ per se but hard rock producers in general such as PLS and Greenbushes which have expansion plans inteh now I think. This is before we get into debates why manufacturers are preferring hard rock over brine, and IMO SQM's move into KDR appears to highlight that point as well (Post #:
25812318 and Post #:
25816692)
All IMO
