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I guess the big automotive company boards get constant questions on what they are doing to close the gap between future demand for batteries and the supply of raw materials? Additionally they are under pressure to reduce carbon. They can easily point to this deal now. Maybe the fact that production is way down the line and uncertain is less of a concern than we might imagine?
By the way I am reminded that Volvo made a substantially bigger investment (Euro 3.3Billion ) in Northvolt last year who of course name partners GALP and SAV…..
GlenG, Lake Res was more than a bit of a con, and the LI industry seems ripe for the picking in this respect, present company exception (SAV) as our main risk (if any) is political;
https://www.afr.com/markets/equity-markets/lake-to-the-party-lithium-play-s-comical-entry-into-the-asx-200-index-20220622-p5avtz
https://1drv.ms/u/s!Aj9GP1JfVKzhgaIetgYAkb5JdsY4lw
Frightening to think that this is almost year old. Some things have changed, eg. spod prices that much higher, and project further derisked with process flow confirmations etc. along with the prospect of 2/3 refineries.
Meanwhile, snap elections added delays but that delivered a majority and EU funds have been confirmed and are in place.
It may be a year old but is still relevant, if not more so. The absent friend chairs at the table remains but hopefully APA will turn up with the DIA/EIA quickly followed by the launch of the auctions.
Indeed InB
Vulcan is high capex and a complicated process yet to be fully commercialised/proven at industry scale like you say. Indeed there’s a risk there perhaps along the lines of what’s been seen with Lake Resources and doubts over its tech.
All this makes a conventional large scale spodumene project all the more appealing to avoid such technological issues and high capex.
Chameleon- talking about low carbon energy I believe Portugal is also quite good on hydropower which DA has referenced for the project quite a bit.
Good weekend all
T hen again, in the scheme of things, potentially a cheap bet should it turn up trumps. Certainly cheaper than a few months ago even with the premium over spot.
Lest we forget, Galp were prepared to pay $6.5m for 10% of SAV 18 months ago, and yet even though Li price up x9, our mcap and sp has gone down. Not saying that maths was my subject but that doesn’t seem quite right
Indeed, Inbrackets. I'm very surprised by that investment, given the seeming lack of proof of comercial viability from Vulcan. As I understand it, shorters have been going after Vulcan for some time now - for that very reason.
Whatever the case, I much prefer SAV's hard rock, open pit mining proposal. It looks a safer bet, particularly in a world which is not exactly flush with cash at the moment.
Do they not need to:
Confirm the commercial viability of the process.
Get through all the licensing process, with all that entails.
Could be sometime yet
The deal ticks a lot of boxes - pump energy and lithium out of the ground on a net zero carbon basis- playing well with Stellantis’ environmental credentials. Portugal hasn’t the geothermal resources as far as I know but has plenty of sunshine to drive solar farms, some floating on water. GALP is all over this and green hydrogen to boot. So lots of low carbon energy, plans for a lithium refinery and battery plant. Just need a fully permitted low carbon mining operation………..
link to investment:
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.investi.com.au/api/announcements/vul/5a778020-7ac.pdf
The OEM (read car maker) major Stellantis has announced a €50m investment into Vulcan Energy in Germany, the first example of upstream investment in a listed lithium company by a top tier automaker.
This is probably the benchmark/blueprint now for automakers - at the Benchmark Intelligence GigaUSA event it was made clear that automakers will need equity stakes in Lithium (and other battery materials) companies if they are to have greater control on the finished product they need to produce batteries for their vehicles.
Judging by the number of gigafactories lined up for Europe and SAV having the most shovel ready, conventional Lithium resource in Europe I suspect we will see a mad rush for similar arrangements here - if not pre-emptive 'in principle' arrangements in advance of the EIA?
Either way the above news goes to show incredible risk v reward opportunity here imo. GLA