Well they obviously don't understand how:
1. Grade translates to more revenue per unit of installed capacity. Infact, 26% more revenue than PLS for each 2 mtpa facility, given it now looks like the AVZ deposit grades 1.6% Li20 compared to say 1.26% for PLS.
2. Then the 1:1 waste to ore ratio here compared to say 4:1 at PLS also means lower operating costs at minesite. When combined with 1, means more starting profit before look at transport.
3. Reducing profit is transport costs as they are a post minesite cost compared to say AJM and PLS, but does 1 and 2 negate that impact.
4. And then in terms of 3 we have tin and tantulum credits and that will reduce transport costs, so IMO our cost curve will be at PLS in total IMO and AVZ will, probably, attain more revenue per tonne of installed capacity.
5. AVZ's issue is timing to market and IMO management as I have previously posted, and why I started the Understanding Lithium Demand thread for the former.
6. The rest of the article is crap, as have seen deposits developed in remote areas in the past, and where there is a will there is a way. If you believe the rubbish talked about in the article well the DRC would never have developed a cobalt industry and Western Australia would never have developed an iron ore and LNG industry given the remoteness and arid landscape that first movers in the past there had to deal with btw (i.e. I see AVZ as a first mover in the lithium space in the DRC). Where there is a will there is a way, and in terms of the other thread, the growing market is hydroxide and not all lithium is destined for that market. What happens in the industrial grade market is essentially irrelevant longer term - if their is an oversupply in the industrial grade market it should have limited impact on the battery grade market in due course because you can't use industrial grade lithium to produce top end batteries in any event and that is where the growing demand is (and it might cost you a bomb to strip out the impurities in industrial grade to convert to battery grade, assuming the industrial grade lithium can be converted and that depends on impurity levels btw in it and likley to cost a bomb so buying cleaner and better spodumene is the go for converters btw).
7. As to oversupply issues they are short term - why, the fools in the article think you can install capacity at an incremental basis to perfectly match with demand. It is economics 101 because that doesn't happen in the real world as investment is lump sum, and when you install capital you do have some excess capacity short term until demand catches up and the reason why you can do it is your NPV is positive and that is why it is done orelse the whole thing becomes a circular argument and you never invest because demand and supply never can be perfectly matched. The same thing is happening in LNG (with all the recent developments) but demand is about to catch up to supply capacity in the next year or two there again and new LNG projects will be required etc etc. that is how teh natural order of economic development and new deposits coming to market and expansions of existing mines happens.
8. Without blabbering further my views on why I see AVZ as a feasible deposit to develop are contained in these embedded posts - just need more 'mongrel' in management to get things done IMO:
Post #:
37646469
Post #:
37739957
Post #:
38220639
All IMO
