There was also this tweet from JL >> [MEDIA] Correct me if I am...

There was also this tweet from JL >>




Correct me if I am wrong, but as I understand the only info Mgt have provided to date is the product mix is 'roughly' a 50/50 split between 'primary' & battery grade.


It's unfortunate that Audax no longer has access to the export data as this atleast provided some transparency.

As others have mentioned previously, Mgt have been very fortunate given the last 2-3 years li bull market has allowed them to underperform from an operational sense but still deliver decent margins.   

Now the honeymoon looks to be over you need to question their strategy going forward with the Stage 2 plant limited to JUST 'primary grade' product & subsequent future price volatility.  

This could be a dire mistake in a market becoming increasingly competitive / less attractive as more spodumene supply comes online providing a cheaper alternative feedstock to LiOH converters.  



I hate to think what may occur when Tianqi & the other proposed Aussie based LiOH conversion plants come online but ORE could be painting themselves into a corner with this strategy.


I understand they want to provide feedstock to the new JV LiOH plant in Japan, but why go to the effort of building a Stage 2 plant that (+ 25ktpa capacity) when you are only going to be producing an inferior product ?  

Why not include a purification circuit providing the option to produce Battery Grade/Quality Li2CO3 and fetch a ~40-50% price premium for roughly US$1-1.5k pt in additional cost..?

Going to all this effort to ship sub par 'primary grade' Li2CO3 ex Chile to Japan (roughly 40 days in transit / at sea) for the purpose of converting into LiOH for an additional US$1-1.5k cost per ton (not incl. plant CAPEX) does not make a lot of sense when you could produce a higher spec / battery grade Li2CO3 product for around the same cost and achieve a relatively similar price ?

Am I missing something here ?  Risk v reward doesn't look overly attractive ?

Does anyone else suspect their processing problems (ie. product grade/spec) run a little deeper than they are letting on...?  Hiding actual production costs and pricing as an average of 2 different products is a little sneaky from Mgt.

Maybe the proposed LiOH plant is their way around the perceived plant/purification issues ?

The only other explanation would be TTC forcing their hand with regards to future product requirements..?

SQM & ALB don't look to be expanding production in the Atacama anytime soon.  

The LAC/Ganfeng JV @ Cauchari won't come online until late 2020 at best and who knows when GXY's SdV will secure funding.  So that begs the Q, where is future BG Li2CO3 supply going to come from ?  

IF ORE can produce BG Li2CO3 at a competitive price, why wouldn't they focus on it ??