Correct me if i am wrong, but that extra 15% was never a given, it was to be negotiated.
Mr market valued AVZ as having 51% control up until the extended suspension.
Agree with you in the aspect that Zijin needs to compensate AVZ for devedlopment costs aleady spent plus an added premium of snacks for being a sneaky weasel...........
Aagh, who the fuck knows...........just gotta wait it out, meanwhile as
@John25 has stated, lithium coys are turning the wheel nicely making some nice gains..
LTR 88 - 149, GLN 96 - 131, PLS 206 - 285, AKE 10 - 11.72 etc
FRUSTRATING indeed
@Frank
imo
*Fyi, re:- Lithium coys are turning the wheel nicely making some nice gains..
Lithium exports go parabolic, set to contribute $9.4b to Australia’s economy by 2023-24
The Australian Bureau of Statistics (ABS) says lithium is forecast to contribute
$9.4 billion in revenue to our economy by 2023-24.
Not really surprising since Australia is the world’s biggest exporter of lithium.
“Australian exports of lithium are primarily in the form of spodumene concentrate however as global demand grows, several Australian lithium mines are commencing production of lithium hydroxide,” the ABS said.
In June 2022 exports passed $1b
For most of 2021, monthly lithium exports didn’t exceed $250m, but exports values more than doubled from November to December 2021.
From April 2022 to May 2022, exports of lithium almost doubled again, and in June 2022 surpassed a massive
$1 billion for the first time.
In June 2022, exports of lithium concentrates reached a record high of $1,163m, up $1,073m (1189%) from June month 2021.
And for the June quarter 2022, total lithium exports were $2,632m, up $2,318m (737%) from the June quarter 2021.
WA exported and China imported
WA accounted for over 99% of Australian lithium exports in each month since January 2021.
And China is the one buying it all.
In 2021 China accounted for over 85% of total value in each month of 2021 and in 2022, they accounted for over 94% in each month of the year to date.
Breaking that down into monetary value, in June 2022, $1,128m worth of lithium was exported to China.
That’s around 97% of the total lithium exports for that month.
Mining stocks are cheap like it’s 2008.
So what’s MineLife founder Gavin Wendt backing for 2022, and beyond?
Earlier this week we came across this fine-looking chart, showing just how unpopular US mining stocks are right now:
Price to Earnings Ratio (P/E) is a handy way for analysts and investors to understand whether markets are overvaluing or undervaluing a stock by comparing the price of a company’s stock to the earnings it generates.
It is calculated by dividing a company’s current stock price by its earnings per share. Eddy Sunarto
has a fine explainer of how it works and why it’s a favourite tool here.
2008 – the last time mining companies were this cheap — was an exceptionally volatile time for the metals and mining industry.
Aluminium and copper prices hit record levels during 2008 but by the end of the year aluminium, copper, nickel and zinc had declined 55.5%, 67.8%, 67.5% and 60.3%, respectively, from their 2008 highs. Manic.
This was driven by slowing growth in China, the collapse in liquidity and downgrades to the global economic outlook.
Sound familiar?
In 2022 thus far we have seen declines of 15% for aluminium, 22% for copper, 37% for tin and 12% iron ore for many of the same reasons.
The Aussie version of same P/E chart above is a bit healthier but following a similar trend to the S&P500.
It indicates that investors are predicting greater commodity price weakness ahead, which is going to impact company earnings.
Is that too bearish an outlook, or just about right?
MineLife analyst Gavin Wendt says the downturn is understandable, but at the same time indicates that there is medium to long-term value in the sector given the commodity rush is ongoing.
“Perhaps markets are looking at the commodity cycle and saying, ‘we are selling down resources stocks because we anticipate that the existing downturn is going to be more prolonged’,” he told
Stockhead.
“It could also mean investors are just taking their money out of the resources sector; in fact, many are probably taking their money out of everything right now and putting it into cash,” he says.
It could also just be a short-lived dip, Wendt says.
“Investors tend to get a little bit nervous about the resource sector when you talk about recessions, issues with China, and stagflation,” he says.
“It could turn around quite quickly over the coming months if we start to see China implement some really meaningful stimulus in order to get their construction sector, and the broader economy, going again.”
Gavin’s favourite commodities right now are …
The resources sector is a broad church; demand drivers can differ dramatically between commodities.
As such, some metals will always perform better than others.
Which sectors does Wendt like best for the remainder of 2022 and beyond?
LITHIUM
“I think the lithium sector is still the standout,” he says.
“It’s been a cocktail of negative factors since the start of 2022 — with the Ukraine war, inflation, rising interest rates, question marks over China. Meanwhile, the lithium price has just held up outstandingly well.
“We also had lockdowns in China which means consumers have not been out there consuming – that would be having a big impact on EV purchasing in China.
“There is a lot of pent-up demand there.
“But over the same period companies have been generating great profits from
really strong lithium pricing.”
If lithium and lithium companies can perform that solidly during a significant period of market uncertainty then there is still a lot of upside there, Wendt says.
Demand destruction for lithium?
Not until people stop buying EVs, Pilbara Minerals says
Think demand destruction is coming for lithium?
Folks need to stop buying electric vehicles first. Just ask new
Pilbara Minerals boss Dale Henderson.
PLS has the
hot hand right now, the company that more than any other has exemplified the stunning rise of the lithium sector over the past 18 months.
Average prices for its spodumene from the Pilgangoora mine ran at US$4,267/dmt in the June quarter, powering a $590 million cash build at margins that would make
Rio Tinto blush.
Spot prices are even higher.
Fastmarkets estimates they are trading at US$6625/t, Platts a tick lower at US$6100/t, not unreasonable given downstream chemicals are fetching more than US$70,000/t.
Its latest
Battery Materials Exchange auction announced yesterday pulled US$6350/t for a 5.5% Li2O spodumene concentrate.
Will chemical converters, automakers and battery companies get fed up with these prices, in some cases almost 10 times what they were paying in late 2020?
“That’s the big one everyone grapples with. What I find amazing about what’s unfolding is I talk about a birth of a new industry for lithium, but it’s a whole birth of an EV industry, all happening at the same time,” Henderson said.
“If we just take the EV, where does the cost base go? Ultimately, if the battery can own a higher proportion of the EV cost because you’re saving on all the other stuff, does that enable that to propagate back through to high commodity costs?
“Who knows? Demand destruction I feel will only occur when the person buying the EV says ‘no, that car’s got too expensive, I’m gonna go buy my combustion engine car’.
“I think that’s what creates demand destruction. Now, we haven’t seen that yet because we’re still seeing sold out EVs and all the rest of it. But when we start getting indicators that people are going ‘bugger the EV I’ll take the dirty diesel’ well, I think that would definitely equal demand destruction.”
More Food for thought on a Friday my Friends and Fellow SH's
Cheers
Frank
AVZ 4.5mtpa plant will yield 760kt or 780kt (I forget which) SC6 according to the DFS and the 10mtpa expansion scenario will yield 1.6Mt of SC6 (equivalent some will be processed into sulphate). i.e if the PLS expansion goes to plan this year, between their two mines, they match or exceed the output of what AVZ was planning for the end of 2023 AND its not locked in to low ball supply contracts, it goes on the BMX to the highest bidder (i.e their cash flow will be eyewatering, they said 500M last quarter... the lithium shortfall and possibly the price per ton they can get, might increase).
copperbeltkatangamining.com
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