On motive IMO IMO IMO IMO
I'll make it easy for what Howard was trying to do. By using a low quality LC price of US$4000 per tonne he was in effect seeking to show that sulphate was not viable for AVZ, or not very profitable. Given that price bears no reflection to what the price of good quality lithium carbonate is, and the fact that you need to understand prices at point of production, not now, is also the other factor, and the price forecasts are much much higher prices. If he believed in that price as a future price, and what he is insinuating then all new greenfields projects are uneconomic, including the ones him and Joe are 'consulting on' themselves as been the next ones up.
I have noted your comments in the other thread that teh SQM carbonate price Howard was using was for low grade carbonate itself, which is poor form by Howard IMO - Post #:
49909026
Why - well, before I stated there are 7.5 tonnes of spodumne grade 6% to each tonne of lithium carbonate. Given the downstream costs of converting spodumene to lithium carbonate (i.e. lets take 50% of $4000 per tonne) what is really been implied is spodumene 6% grade can only be sold for about US$267 per tonne. It can't be sold at US$533 per tonne (4000/7.5), because you still have all the downstream processing costs of carbonate production, so ineffect if you believe in that nonsensical price as a future price, well spodumene prices are essentially assumed by Howard not to rebound. In other words he is essentially implying that the EV market will not grow if they truly believe the carbonate price will be US$4000 per tonne, and if Howard believed in that price, well he better look for another job as no greenfields deposits will be developed. In other words I question his motive here in taht article of his.
Conversion costs:
This picture below is old, but the key to the picture below for spodumene is that, noting the spodumene input is at mining cost not sales cost - so it is US$323 per tonne spodumene (2100/6.5). The pic is a vertical intergration concept is the point, not a converter buying product to convert:
Why did I post the above - a lot of that processing cost is actually attributed to the roasting process, as can be shown below, but yes I did try to find carbonate cost but can still settle on this hydroxide example above of costs to make a point. Now sulphate as per my embedded posts in my last posts is produced after roasting. From the DFS (Section 1.23.1 and 1.23.2:
Opex cost:
This aboveTable is important when you compare that to the processing cost above in the chart - you can see the impact of roasting on processing costs, and so everyone is clear what I mean, these two charts in the embedded posts above I am now bring here so people understand where sulphation takes place - it takes place after roasting:
Capex cost DFS:
Overall
Some of the capex, outside just the lithium sulphate plant will also be attributable to sulphate. Whilst on nominal cost, you might say yeah viable, as revenue > costs, on economic principles the sulphate plant IMO will be marginal at best in a NPV/IRR sense at a price of US$4000 per tonne price. You would be better off, profit wise, selling at the DFS spodumene price, which is ironic in itself given Howard didn't seek to readjust that price LOL. Given spodumene prices have a relationship to hydroxide and carbonate prices, so why the hell didn't Howard give his revised spodumene forecasts (refer opening paragraphs to this post).
Either Howard is overrated as a 'industry expert' or he had an agenda with his article IMO IMO IMO IMO IMO
All IMO.
