Spodumene Prices, page-2705

Now that the US Inflation Reduction Act is legislated, I believe it will be on for young and old for those OEM’s trying to secure supply from friendly trading partners. Otherwise, wait another 7 years for permits for US mining hopefuls. If they (US OEM's) want to be in the business of producing EV’s, they really don't have many choices, ands the time line for infra build out and organising their friendly suppliers is quite short, ~2.25 years (DEC 31 2024). How will lithium prices not increase in this environment, exacerbating the already tight market conditions. I reckon there will be a severe bout of flinching freckle syndrome for all actors in the chain who rely heavily on imported feedstock, maybe worse, winking freckle, and form to date I'm not sure OEM brains trust has the capacity to deal with the transition.

Early signs of the above looming chaos was confirmed during a telephone call I had with Dale late Friday afternoon. We spoke all things PLS, but interestingly, a Ford executive (no names) flew directly into Oz on the companies learjet and turned up at Pilgangoora office 8:30 in the morning for a supposed arranged meeting, below is a summary of what transpired during the meeting;

Hendo - Welcome Mr Ford, please get off your knees and put your pants back on, though I like your Tesla undies, did they come with your M3?

Mr Ford - Thank you, I'm glad to be here, oh your right, but I wasn’t wearing those underpants when I boarded the plane yesterday, it was a very strange and rough flight, and speaking of Tesla, I dreamt Elon was flying the plane.

Hendo – Wow, a wild ride?

Mr Ford – let’s not go there, I’m still trying to put the pieces of the past 24hrs together.

Hendo – Okay, how can we help?

Mr Ford – I’m glad you asked, well first up, do you believe you can deliver our 150kt of hydroxide offtake before Sep 2025.

Hendo – What, we do not have an offtake agreement with Ford, so probably not.

Mr Ford – WTF, Ford is expecting 150kt of hydroxide per annum before said date, along with repayment of $300 mill debt.

Hendo – Sorry, it seems Elon was flying the plane, he’s dropped you off in the Pilbara, you’re at PLS’s Pilgangoora mining site, not LTR's Kathleen Valley.

And just FYI, your offtake with LTR equates to roughly 21kt of hydroxide, not 150kt….(enough for 6,000 F150 units), and your spod to battery grade hydroxide calculator is broken.

Mr Ford – WTF, 6,000 units, more like 600k, and can I ask what is spod?

Hendo – Sorry, but are you serious, here we go again, the OEM brains trust at its best. By the way, word on the street is that Elon in meeting with LTR management this morning.

Mr Ford – Shit, is he?

Hendo – Nah, just messing with you, how can PLS help?

Mr Ford – Well, while I’m here, you have advertised you will have 400kt of additional sp…, spod capacity in the near term.

Hendo – Second warning, get off your knees and pull up your pants or our meeting is over, thank you. That is correct, but the 400kt of sp… spod will not be available on open market, we plan to use that capacity to feed our midstream product

Mr Ford – What is midstream product?

Hendo – Did you fly in from another planet, oh that’s right “Planet OEM”. Anyways, it’s a superior and very green lithium salt which will be produced here at Pilgangoora.

Mr Ford – How much does midstream cost per tonne.

Hendo – Well the salt concentration of lithium is ~6 x that of spod concentrate, and as said, its greener, so a lot more, which ensures the higher margins remain with our business, and not the middle man or yours.

Mr Ford – Oh, okay

Hendo - Let’s do a deal, given I have provided you with this information today, can you please disclose who will be converting LTR’s 150kt of spod to battery grade hydroxide.

Mr Ford – Sorry, I don’t know how the answer that question, that is news to me.

Hendo – Thought so, meeting over, best of luck, see ya when I’m looking at you.

Mr Ford – Okay, thanks for your time, how long will it take me to get to Kathleen Valley from here.

Hendo – By bus, about 5 days, better call Elon, see ya….