Thank you, well considered analysis, much appreciated.
I think using a traditional mining company multiple of 8 is too conservative for a sector that needs to more than triple by 2025 then more than double again by 2030. While only forecasts, some forecasts are at +5twh of demand by 2030, so IMO they need to be allowed to run a little hot (multiple of 12) for a few years in order to encourage and sure up the required supply. Also, given many of the brine, DLE and non-conventional projects take longer to come on line, I think you need a new crystal ball with 2030 vision.
At present 2025 forecast battery capacity exceeds your 2025 1 mill tonne lithium supply estimate. If I apply +/-100gwh sensitivity analysis over forecast battery capacity, 1 mill tonnes LCE is short on both measures, 110 or 284k tonnes respectively.
Like back in 2016/17, there were over ~200 lithium mine hopefuls lining up, yet only 6 come on line, and of those 6, 3 failed (Alita/AJM/NMX). Certainly not a good track record, therefore, when calculating mine production, It's best to assume only 80% of nameplate (paper) supply comes on line, which over the past 3 years has been way lower than said 80%, including mothballed existing producer expansion plans.
Just focusing on the spod current and potential production, there is probably 7 projects that could produce 1 mill tonnes of spod per year, they are - GB, PLS, Wodgina, Mt Holland, EMH and AVZ. Thus 7 million tonnes once fully developed, maybe by 2030, given they will expand over time inline with market needs. Apply 80% sensitivity analysis, you arrive at 800kt LCE by 2030, maybe sooner, but not 2025, so -600kt LCE by 2025 when you include Mt Marion, JB/GXY, PLL, LTR, NMX. However, your stance on African projects getting a ticket to mine by 2025 is bullish, which implies much higher lithium prices than you are forecasting.
Yes, there are a number of marginal spod projects globally, and they will do okay if prices remain high, but will hit the same problems as Alita & AJM in the cycle lows.
Will brine, DLE and non-conventional projects be able to deliver 400kt LCE by 2025 and 1.2 million tonnes by 2030, big ask IMO. On that note and as said before, will need all decent and half decent projects to come on line in this decade and beyond.
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