Running discussion on SP, page-54612

*Thank the Lithium Gods we have something to Smile about when it comes to Spodumene, Carbonate & Hydroxide prices atm Sam


New projects, restarts and upgrades — prompted by higher profit margins — will lift global spodumene capacity by 180,000 tonnes per year of lithium carbonate equivalent (LCE) when they come on-stream, according to new Argus analysis.

This will help rebalance the market in the coming two years, it says.

Argus last assessed 99.5% grade lithium carbonate prices at 185,000-195,000 yuan/t ex-works on 21 October – up 276% since the start of 2021.

On October 15, Benchmark Minerals Intelligence estimated that battery grade lithium carbonate (ex-works China) was up 322% in 2021, while lithium hydroxide had gained 252%.

When it comes to raw materials supply, like spodumene, the numbers are just as impressive.

Average prices for the hard rock feedstock are currently up more than 270% from below $US500/t year-to-date.

Miner Orocobre says it achieved contract pricing of around $US1,650/t for October-December spodumene contract sales and around $US12,000/t for lithium carbonate contract sales.

That’s a 100% gain in just three months.

Meanwhile, Pilbara Minerals’ third auction on the Battery Material Exchange digital platform for 10,000t (SC5.5%) spodumene went off at a record $US2,350/t.

It outshines auction No 2 on September 14, which went off at a then-incredible $US2,240/t to single handedly spark a historic 86.5% month-on-month increase for average spod pricing industry-wide.

With very little new production due to come online in the short term, the immediate outlook remains bright for miners.
In 2019 I was asked whether lithium prices in the next price surge would ever reach the highs of 2016.

My response was this time it would be more aggressive. Instead of the late 20s, prices in China would exceed $40,000/t

There are a few reasons — Simon Moores (@sdmoores) October 6, 2021









Cheers

Frank

p.s - Speaking of VUL re: Qball's post - Elpha's Tweet

I see the Smelly Stuff has hit the Spinning thingy as,

Lithium darling Vulcan Energy calls a halt in the wake of J Capital short report

Activist short seller J Capital Research has put ASX market darling Vulcan Energy in its cross hairs, calling the company a “wannabe lithium miner” which “based highly optimistic assumptions for (its) project on work done by small consultancies that were owned by management and acquired by Vulcan.”

Vulcan has also been the subject of some scepticism.

While it maintains both its component parts of geothermal energy generation and direct lithium extraction are well understood and existing commercial technologies, no geothermal lithium project has entered commercial production to date.

“They claim the project is a twofer: profitable geothermal power and “green” lithium,” J Capital’s Tim Murray wrote in the note, titled ‘Vulcan: God of Empty Promises’.

“Neither assertion is likely to be true. ”

“Our research shows that the project may never actually get under way: the costs are higher than the company claims, output will be lower, the environmental impact is brutal enough that public outcry will block permits, as has happened before in the area, and the quality of the lithium resource is low.

“Many experts agree with us that this project is a non-starter.”

A more detailed response to the claims made in the J Capital report appears to be on its way.

What did J Capital claim?

J Capital claimed in its report that several positive claims made by Vulcan in its January pre-feasibility study were inflated. The PFS gave the Zero Carbon Lithium Project a 2.8 billion Euro NPV.

Murray said “assumptions in the PFS that beautify the project are easily disproved.”

He claims Vulcan has likely overstated its flow rates and recoveries in the PFS, and ignored evidence of community opposition to geothermal energy projects in Germany and adjacent regions of France.

He also criticised the use of Vulcan co-founder Horst Kreuter’s consultancy Geo-T, later purchased by Vulcan, in its PFS.

Murray claimed Kreuter received 1.5m performance shares on the successful completion of the PFS, and resigned as a director on March 25.

Vulcan also acquired Gec-co, which had worked on the PFS, having appointed its CEO and owner Thorsten Weimann as COO of Vulcan.

“Gec-co and GeoT provided a key assumption for the PFS, for flow rate, that is unrealistic,” Murray claimed.

“The recovery rate for lithium is also unrealistic. Realistic assumptions would halve the output of lithium and kill the commercial viability of the project.”

Among a litany of other claims, J Capital says Vulcan has published an unrealistic production schedule and is likely to face significant public opposition, something MD Francis Wedin said was not likely in an interview with * in July, and that geothermal wells often have a high failure rate.

Although it released a statement this morning, Vulcan requested a trading halt “pending an announcement to the market in order to prepare a response to an online report.”