You touched on something that rarely receives a mention, yet I believe is one of Talga's strongest advantages and that is its location. Logistics!
Remember a few years ago when Japan discovered "just in time", we thought they were going to conquer the World. Where possible they eliminated intermediate stocks in their manufacturing processes and jumped to a higher level of efficiency and a lower level of costs than the rest us. Eventually we all gradually followed suit and Japan's party was over.
With Talga's location being so close to the battery plants in Europe, they have such huge advantage that it at least balances Sweden's higher cost structures. Not only are transport costs at an absolute minimum, but all the extra stock holding costs that need to be paid by some one to cover the long and slow shipping together with its probability of unexpected delays.
You as a Captain on merchant marine vessels will remember all that.
Another point you made was about identifying who gains by putting Talga and Syrah (and other battery manufacturers and their materials suppliers) out of business.
There is only one answer and that is China.
Currently they are in complete control and no doubt intends to stay that way.
They have identified that one of our democratic weaknesses (or their advantages) in financing and growing new enterprises. The start up cash made available is extremely dependent on the enterprise being able to repay that investment on time, in full and with interest.
This leads to calculations of projected IRR, payback period, NPV etc which are all highly dependent on the guesses as to selling price each year into the future. The most important of these is the current selling price. It trumps all other assumptions in the calculations
When you own the entire supply chain, it not difficult to manage prices for short periods of time. Even making prices behave erratically would be enough to put the frighteners on the people with the money.
Enjoy the rest of your Sunday, Oldjrow
TLG Price at posting:
60.5¢ Sentiment: Buy Disclosure: Held
(20min delay)
