BODES WELL FOR AVZ - Time is ticking and America is going to receive a wedgy from China if they are not careful.
LINK:
https://x.com/Mark4XX/status/2026747854102946002?s=20
A good post by Dwayne Sparks responding to the mineral export ban by Zimbabwe this morning:
https://x.com/sparkes_dwayne
Dwayne Sparkes
@sparkes_dwayne
No coffee today as i spat it out reading the news that Zimbabwe is bringing forward the ban of unprocessed lithium exports, effective immediately. The export of all raw ore and spodumene concentrates is immediately banned.
A lot of tonnes about to come out of the supply side.
The only producer that doesn't export concentrate is the Arcadia mine by Huayou Cobalt, who have recently commissioned a lithium sulphate plant. The Bikita mine is also set to have a sulphate plant built but to the best of my knowledge it isn't completed yet.
Lithium sulphate is an intermediate product between spodumene concentrate and lithium carbonate. Sulphate contains about 12.62 Li which equates to about 27.2% li2O. Compare this to lithium carbonate which contains 40.4% li2O.
Why produce sulphate instead of lithium carbonate? Well the answer is quite simple really: Lower capex, less power and water, save on transporting costs of raw ore (more tonnes). Instead of transporting concentrate, you're shrinking it by ~ 4/5 fold. It works well in jurisdictions that are considered unstable.
You lower the transport costs and in turn don't have to put in the same capital as you would with a lithium hydroxide/carbonate plant.
This year from Zimbabwe alone, i had the following producers doing spodumene concentrate in my supply table: Sabi Star~ 280kt SC6 eq Dison Gwana ~ 100kt SC6 eq Bikita ~ 380kt SC6 eq Kamatavi ~300kt SC6eq Zulu~50kt SC6eq 1.11Mtpa of SC6 equivalent halted. That's about 140kt of LCE.
In a tightly balanced market, it could get scary. As I've said before (i really am a broken clock), in 2022 during the boom, 784kt of LCE hit the market and the demand was 854kt of LCE, an 8% deficit. An 8% deficit is what cause the massive spike in lithium price.
It was then a 1-3% surplus that caused the massive downturn in prices. Its a very fine balance in this lithium market and small factors could throw it into a deficit/surplus.
From what we've seen, small surpluses/deficits cause massive price swings. 140kt of LCE has just come out of the market. Food for thought.
Thanks for reading!
