Cathode materials competition, page-6

You guys have completely missed the point!

The point is that SKI has choices. It does not necessarily 'need' what AUZ has. There are alternatives.

The key alternative is its current suppliers - Ecopro and L&F.

Both have been in the game for many years and both are well ahead of the curve in recognising current opportunities.

Ecopro has just undertaken an IPO to spin off an EV battery supply vehicle (Ecoprobi). It has just announced its intention to increase production six-fold over the next 4 years to cater to the cathode needs of current customers (such as SKI) and new customers.

By 2023, well before SKI has ramped up production to nameplate, Ecoprobi will be producing at least 3 times what Sconi can produce at steady state. It is explained in these two paragraphs, from the earlier post:

"Hanwha Investment & Securities said, "Ecopro BI's annual high nickel anode material production is expected to increase from 30,000 tons this year to 180,000 tons in 2023."

"We expect Ecopro BM to maintain its position as a leading supplier in the high nickel cathode material market," said Hanhwa Investment & Securities. "The NCA cathode material market is dominated by three oligopolistic markets, including Ecoprobi, that account for more than 90% of the market. NCA production is expected to grow to the top of the global market this year. "

Like its Korean competitors (LG and Samsung) SKI is looking at opportunities to acquire at least some of its cathode materials directly from miners (which it may or may not have a stake in) rather than cathode-anode intermediaries (such as Ecopro, L&F, Sumitomo, Umicore, Posco etc). Presumably to have more control over its upstream supply chain.

However, it will only do this if it make sense - that is, if the acquisition and processing of sulfates and other cathode materials is more economic than acquiring them via the intermediaries.

Hence SKI waiting on the sidelines until the optimised BFS and finance are determined - so that they can make such a decision.

Those who believe that the EV revolution is going to be on such a scale, that Sconi 'must' be mined have got it all wrong. They don't understand the complexities of the demand and supply dynamics in this space.

It might be mined but it is far from a certainty. The market understands this. Hence the current share price.