The Future?

Has anyone here speculated on a scenario for the lithium sulphate off take venture? When I met with NF in Melbourne at the shareholders presentation, he was very keen and bullish on this product as it was not being produced by any other producers and it would resolve two aspects of AVZ’s operations.........transport and a unique product.

We now know it’s real as a prospect since the DFS. There is a specific quantity proposed. It all appears as if a customer has been in deep dialogue and we know the technical guys Sichuan Calciner have been at the very least converting Manono SC6+ to ascertain characteristics and to tap in the plant process flow sheet. I also researched a little and see General Lithium are planning to build a plant that accepts sulphate as the primary feedstock not SC6…

What we don’t know is who is the end customer?

It could be Yibin Tianyi easily or General Lithium.

However for Port Lobito it makes sense it heads to the other great domain for the EV revolution, Europe where a planned 400Gw hours of production is planned.........and that’s just the start.

So far there has been proposals to produce Lithium hydroxide in Europe but there is no clear front runner as the Europeans look for somewhere close by to derisk supply. One example is in Spain and is securing collaboration with the EU battery alliance and funding. European lithium also in the headlines

Manono however is a vastly superior resource to this Spanish lithium resource that only clocks on 0.63% lithium oxide for its JORC indicated resource. It hasn’t achieved a measured category. So you can see the hidden risk here regarding processing and end products being affected, including lithium hydroxide. However on a sovereign risk level the Congo is not low and equal in risk to the Spanish located resource.

Conversely the Chinese are mostly comfortable with risk in the Congo and we know it’s changing for the West as political measures are ticked off by the new presidency in Kinshasa.

So what do I see happening?

Note that there is Asian and specifically Chinese joint ventures in Europe with EV manufacturers and this cooperation is likely to stem all along the supply chain to mine site. We can see that in Spain, but the resource is likely more high risk for cost of processing than the EU battery alliance is willing to admit at the PFS and pilot plant level of study.

What do I see happening?

Whoever from Europe takes lithium sulphate from Manono, will need to complete the integration into the supply chain with a lithium hydroxide processing plant. Or does AVZ get into a JV in Europe with a convertor?

That could mean AVZ joins CATL with Yibin and sets up a JV close to a gigafactory.

Or we could see a new player like North Volt JV with a specialist. Take your pick from any of the current lithium hydroxide producers.

Having said all that well founded speculation, in my opinion, AVZ may just realise a JV in Europe just as PLS realised one with the Koreans in South Korea.

Because let’s face it, the best way forward is that AVZ has Chinese and European partners, and beholden to no one customer of a certain jurisdiction.

FIRB’s “rebuff” to quote the AFR, paves the way for a more sound investment for AVZ, with a major backer unless Yibin are at the table.

All it needs is to roadmap where and who wants that lithium sulphate for upstream conversion to seal the future for decades (imo) to come.

All IMO & DYOR