Posted on LTR thread today on the crapper.
BTW You chartists, LTR appears to be in a death spiral, but will turn around one day unless its taken private, which I doubt.
FYI:
https://www.copyright link/markets/...d-year-for-lithium-dealmakers-20241216-p5kyl5
Allens tips ‘action-packed’ year for lithium dealmakers
Alex GluyasMarkets reporter
Dec 16, 2024 – 12.40pm
Top-tier law firm Allens predicts a wave of dealmaking in the critical minerals sector next year as lower borrowing costs and higher demand for the commodities needed in the energy transition fuel a rebound in prices.
The firm’s bullish outlook follows a turbulent 12 months for the sector – which includes lithium, copper, nickel, cobalt, and rare earths – as new supply outpaced demand, triggering a sharp fall in commodity prices and halting mergers and acquisitions.
But Allens says green shoots are emerging, highlighted by a string of big-ticket deals over the past 12 months. Although there were just 24 transactions in the critical minerals space this year versus 49 in 2023, the total deal value was $14.8 billion compared with the previous year’s $5.3 billion.
That has largely been fuelled by lithium prices collapsing more than 80 per cent in 2023 and 2024, which triggered a flurry of dealmaking, including Allkem’s $10 billion merger with Livent, Rio Tinto’s $10 billion acquisition of Arcadium Lithium and Pilbara Minerals’ $560 million purchase of Latin Resources.
Allens advised on many big deals in the critical minerals sector this year and said the momentum would rise in 2025 and spill over to other commodities.
Interest rate cuts in the US and Europe, the prospect of rate cuts in Australia, and a moderate price recovery for critical minerals in 2025 set the scene for an action-packed year in which M&A activity is expected to rebound,” Allens partner Charles Ashton wrote in a report set to be released this week.
“Investors will have greater flexibility to expand and diversify their portfolios as funding costs fall and project economics improve.”
Mr Ashton is also betting that developers will increasingly rely on creative financing strategies to get deals over the line, given they have struggled with traditional forms of financing because of softer commodity prices.
Government lenders are increasingly providing support during the initial phases of a project’s development and as it gains momentum. Similarly, customers focused on securing long-term supply are digging into their own pockets to assist with start-up funding.
China’s stranglehold
“Ultimately, given customer lenders want the product rather than straight repayment of the debt, they can apply a different credit lens, thereby removing some of the obstacles to a traditional project financing,” Mr Ashton said.
However, he said major domestic and international lenders would remain critical to funding critical minerals projects, given interest rates were expected to fall next year.
“Many banks are still bullish on critical minerals, and we expect they will be eager to put their balance sheets to work to finance the energy transition as prices recover,” Mr Ashton said.
The Australian government is also expected to get more involved as countries look to reduce their reliance on China, which wields significant influence over processing and battery manufacturing.
Indeed, China remains the single most influential player in global critical minerals given its competitive advantages including economies of scale, abundant capacity, lower labour costs and government subsidies.
Goldman Sachs noted in a recent paper that the operation of a $230 million, 50 kiloton per annum lithium hydroxide plant in China would cost $650 million in Australia.
Governments around the world, including Australia, have recognised that the concentration in China creates geopolitical risks and have taken action to address this imbalance.
The Australian government recently reaffirmed its commitment to Iluka Resources establishing a domestic rare earths supply chain, by upsizing the funding package provided for the construction of the Eneabba Rare Earths Refinery.
Allens believes the government will become increasingly willing to invest directly in critical minerals projects and entities for the long term. The firm expects like-minded partners around the world to co-operate and also coordinate their critical minerals investment strategies.
BTW You chartists, LTR appears to be in a death spiral, but will turn around one day unless its taken private, which I doubt.
FYI:
https://www.copyright link/markets/...d-year-for-lithium-dealmakers-20241216-p5kyl5
Allens tips ‘action-packed’ year for lithium dealmakers
Alex GluyasMarkets reporter
Dec 16, 2024 – 12.40pm
Top-tier law firm Allens predicts a wave of dealmaking in the critical minerals sector next year as lower borrowing costs and higher demand for the commodities needed in the energy transition fuel a rebound in prices.
The firm’s bullish outlook follows a turbulent 12 months for the sector – which includes lithium, copper, nickel, cobalt, and rare earths – as new supply outpaced demand, triggering a sharp fall in commodity prices and halting mergers and acquisitions.
But Allens says green shoots are emerging, highlighted by a string of big-ticket deals over the past 12 months. Although there were just 24 transactions in the critical minerals space this year versus 49 in 2023, the total deal value was $14.8 billion compared with the previous year’s $5.3 billion.
That has largely been fuelled by lithium prices collapsing more than 80 per cent in 2023 and 2024, which triggered a flurry of dealmaking, including Allkem’s $10 billion merger with Livent, Rio Tinto’s $10 billion acquisition of Arcadium Lithium and Pilbara Minerals’ $560 million purchase of Latin Resources.
Allens advised on many big deals in the critical minerals sector this year and said the momentum would rise in 2025 and spill over to other commodities.
Interest rate cuts in the US and Europe, the prospect of rate cuts in Australia, and a moderate price recovery for critical minerals in 2025 set the scene for an action-packed year in which M&A activity is expected to rebound,” Allens partner Charles Ashton wrote in a report set to be released this week.
“Investors will have greater flexibility to expand and diversify their portfolios as funding costs fall and project economics improve.”
Mr Ashton is also betting that developers will increasingly rely on creative financing strategies to get deals over the line, given they have struggled with traditional forms of financing because of softer commodity prices.
Government lenders are increasingly providing support during the initial phases of a project’s development and as it gains momentum. Similarly, customers focused on securing long-term supply are digging into their own pockets to assist with start-up funding.
China’s stranglehold
“Ultimately, given customer lenders want the product rather than straight repayment of the debt, they can apply a different credit lens, thereby removing some of the obstacles to a traditional project financing,” Mr Ashton said.
However, he said major domestic and international lenders would remain critical to funding critical minerals projects, given interest rates were expected to fall next year.
“Many banks are still bullish on critical minerals, and we expect they will be eager to put their balance sheets to work to finance the energy transition as prices recover,” Mr Ashton said.
The Australian government is also expected to get more involved as countries look to reduce their reliance on China, which wields significant influence over processing and battery manufacturing.
Indeed, China remains the single most influential player in global critical minerals given its competitive advantages including economies of scale, abundant capacity, lower labour costs and government subsidies.
Goldman Sachs noted in a recent paper that the operation of a $230 million, 50 kiloton per annum lithium hydroxide plant in China would cost $650 million in Australia.
Governments around the world, including Australia, have recognised that the concentration in China creates geopolitical risks and have taken action to address this imbalance.
The Australian government recently reaffirmed its commitment to Iluka Resources establishing a domestic rare earths supply chain, by upsizing the funding package provided for the construction of the Eneabba Rare Earths Refinery.
Allens believes the government will become increasingly willing to invest directly in critical minerals projects and entities for the long term. The firm expects like-minded partners around the world to co-operate and also coordinate their critical minerals investment strategies.
