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to be exact would approach battery material suppliers (e.g. EMH) at the ESG point of the gigafactoid development plan and use assumptions that the factory could meet the ESG requirements even if it could be stated that ESG could be further improved - herein lies EMH to the rescue - assuming that KC working on enhanced mine/materials processing/supply ESG too - which is what I would expect to be taking place as we continue to ponder. I think that putting pressure on miners and factories to consider having a more robust ESG plan is a great thing - will result in having wheat from the chaff. EMH / KC understand this well it would appear.
the materials suppliers/miners must have an idea how far the commodity prices can go before customer could leave the [negotiating] table - we do not want irrational greed to set in (always a risk where humans are concerned !!) - I hope for reasonably acceptable and relatively stable commodity prices to accommodate all tiers of a fully integrated production/manufacture process to assure the kickstart to EVs / storage as a lasting benefit to us all.
In the days of falling prices (post 2017), I think miners were highly incentivized to enter into short-term contracts. In today's environment of rising prices, the incentives are different. I think the "offtake wars" will happen soon enough once the OEMs realize that the rhetoric from guys like Musk that "lithium is abundant" is BS and that prices ain't coming down anytime soon until more miners get into the game (and DLE and clay extraction is shown to be economically viable).
Not unheard of to have an agreement to supply at spot price within a range (floor to ceiling) against which an economic sensitivity case can be assessed.
Altura had such an agreement in place with ganfeng who reneged (ouch) when the spot prices fell fa below the $500 floor which contributed to Altura's demise.
The right offtake partner and legal framework will be V important.
just my 2c
fully agree with that, the only thing is that I do know in the PAST that Aussies have prefered to have buy and sell at the market sp at the time, I do say in the past im sure KC wont want that now, Get a good price locked it in and banks see How long before they get their money they are more likely to lend it and on good terms,IMO its solid business sense.
I agree that is what is likely going on. KC is hugely incentivized to secure a better price for fixed number of years in a rising-price environment. A higher price will enhance the DFS and make borrowing far easier. I do not agree with DP, who suggests the pricing would be flexible -- KC would be an idiot to agree to that, because lenders want fixed prices to support underwriting. My $0.02.
I am sure that way before annoucing Battery factorys companies will been trying to get their Lithium secured but who knows if KC and others have seen the demand and are holding off for a better price , plus you have to factor in CEZ and How they do business which I dont know that much about it will be their call as much as KC but im sure neither will turn away a good off take,
Discussions with suppliers will be well advanced by now - I would have thought.
Bit of the ol' chicken and egg going on - I think I would rather secure a site to build a gigafactoid then secure the battery materials immediately afterwards. If other way round - what price would the off-take be to an unsecured factory site. So, imo - it is what I would expect - also expect news to follow these new car/battery factories to start the fight over securing their resources.
Now SVOLT building in Germany . . ? more massive local demand!
Yet ALL these majors are with no local EU supply agreement secured!
It just doesnt make sense.
However . . . only strengthens EMH/CEZ bargaining ability when they come in for a bidding war.
another new customer . It is also building a battery factory in Germany.
https://auto.economictimes.indiatimes.com/news/auto-components/great-wall-linked-battery-maker-svolt-in-talks-to-raise-462-770-mn/82159326
Will do Arnaud.
@Antelope, any chance you stop feeding this troll ?
Yes. Plenty. But given the tone of certainty of your post I'm not wasting my evening educating you. As for those parts that are mere conjecture, I neither agree nor disagree.
Makes you wonder why CEZ didn't take over all the mine doesn't it?
I'll put my money on Keith announcing the take off(s)
DP you have this unpleasant habit of shooting your mouth off as if you know everything. I've been here for five years. I have a good understanding the nuances. Nuances that you aren't aware of. And I can tell you that you are not accurate regarding CEZ's original motives. The rest of your comment is supposition, theory and opinion. State it by all means but don't state it as fact. You may be right. But you may also not be.
You really could do with a lesson in humility.
Yep, that's what many forget here, that CEZ is the boss with the 51 percent that they hold.
Sorry... expects an agreement, not a discussion!
I think it's well known that offtake discussions are ongoing. KS has publicly said he expects one soon. Given that VW own Skoda in the CZ, quite apart from the fact that we're likely to be a primary source of Li in the EU, I would expect VW to be one of the parties he's having discussions with.
Presumably radio silence and vw making noise about gigas would tend to suggest there may be sensitive offtake conversations ongoing?
There are a number of reasons why CEZ took a majority shareholding. As for a CEZ gigafactory, I don't think it's a given at all. They spoke about it before VW announced they were building gigafactories all over the place. If a JV takes place between VW and CEZ, then the amounts required for an offtake agreement won't yet be known, and VW would be angling for supplies for their others factories too. So yes, complicated. But all good news for EMH.
Obviously we're all waiting for an offtake agreement to be announced. But it's complicated in EMH's case because CEZ need to declare their offtake requirements, if there are any.
They need to decide:
A/ are they going to build their own gigafactory in the CR?
B/ if they do, do they do so as a JV with VW?
These are going to be complicated discussions and may take a while. In the meantime we know that whatever the outcome, there will be an offtake agreement with someone in one form or another.