PAM (ASX) Thoughts on lepidolite discussion

Originally posted by b7667: ↑

One common theme I see while occasionally browsing many lithium companies on HC and is the bashing that lepidolite frequently gets. It could be a blame game for all of the problems facing the global lithium industry on Chinese lepidolite or have solid grounds. The posts are usually around that China is flooding the market with low grade or low quality lepidolite to crash the prices, the high amount of waste product from processing lepidolite (worse for the environment and more expensive to store waste), or that it is expensive to produce chemicals compared to spodumene so Chinese mines are closing down. Feel free to add if I missed any.

I assume that like with spodumene focused companies, there will be a range of grades from lower to higher and cheaper to more expensive producers for lepidolite too. It would be similar to CXO vs PLS.

PAM have often shared this chart to show that Yongxing producing battery grade chemicals at the bottom 1/3 of the cost curve. They also seem to be planning to use proven technology and ore sorting is fixing the grade issue to reduce waste.

What are your thoughts on the feasibility of lepidolite and are any of the concerns/hate thrown around by HC users justified? If any concerns are justified, in what context would they be for?

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Good thread @b7667
Yeah you can count me in the Lepidolite "bashing camp" ... sounds strange coming from a PAM shareholder though doesn't it.

Now these are all just my opinion and mostly generalizations
1. Lithium mining (in all forms ... hardrocks, brines, clays) is hardly environmentally friendly. It's just a relative to one another and mining overall.

2. Low Grade = High Waste ... well its true ... you have to process 2x the rocks at 0.5% Li2O than if the rocks were 1% Li2O and if you compare low grade lepidolite of China (I've heard as low 0.3%) to high grade spodumene (1.5%) then its 5X.

3. "China is flooding the market with low grade or low quality lepidolite to crash the prices" ... yes well the market we are referring to is the China domestic market. This is what happens when the refining capacity is concentrated in one place (and one I'm happy to admit I care very very little for - sorry - just being honest). So imports (e.g. Australian spodumene or Sth American Carbonate from Brine) are competing mostly against Carbonate refined from (Chinese sourced) lepidolite/carbonate and from Carbonate refined from (Chinese sourced) Brine. The domestic producer has the advantage. And besides, Chinese State Sponsored Entities (and they all are SSEs ... even the publicly listed companies including big Chinese O&G, Banking, Manufacturing) skew market dynamics.

I look forward to the days when Lithium Hydroxide refining is available in North/South America and Europe and Australia (more than just Kemerton and Kwinana) and Asia ex-China (Korea, Thailand, India, ...). And when countries start implementing Cross-Border-Carbon-Tax to put a fiar price on emissions (so penalize high carbon Chinese producers) end users will pay a premium for quality low carbon products.

4. I don't trust a single financial metric that comes out of China ... so for me Yongxing financials are not reliable (yeah I know they are publicly listed blah blah). PL has his nuts on the line with his commentary on Capex and Opex for PAM Concentrate-to-CAM JV. He has my trust until he doesn't on this project. I accept we partner with China out of necessity because they have the know how.

5. Thailand could be a "closed loop" market. That's attractive to me. Ore-Concentrate-CAM-Gigafactory-EV OEM-Recycling. That has both efficiency and scale and a very big reason why I am invested in PAM. LEPIDOLITE has to been successful if Thailand wants that end-2-end circular economy ... otherwise they are just importing CAM to feed the Gigafactory to supply the auto OEM.

Net Net ... I don't think China price will influence RoW price any more by say 2030....hopefully.