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That should be: Concentrate suuply shortfall vs demand ahead is obvious.
China in the early years while the US and Europe fanny.
Tennessee will be late, Tesla and LG are fully supplied from NAL? It looks more probable all Ewoyaa sc6 will go to China then.
That Piedmont where saying they did not want to dilute and that NAL sales have provided little cash flow was putting a cloud over whether Piedmont might delay the Ewoyaa capex FID was my thinking on why so much down pressure on the ALL sp. This decision to follow Atlantic down the up front cash for capex off take route solves that. Only game in town?
Concentrate demand shortfall ahead is obvious.
Onward.
More on Ewoyaa from 31.45.
First on Ewoyaa from 3.25 in.
Piedmont proposing their own offtake for their share of product.
https://youtu.be/uVjMlfggkzY?si=kAmRNYK2ymGp_-W7
The alternative to an offtaker getting more favourable pricing for providing funds in advance of delivery with a multi year deal is that their cash buys assets at the deal point in time, eg as Piedmont did. Atlantic have not ever mooted this possibility (which would obviously be dilutive to holders) afaict.
Whatever, getting this finance is paramount to project success. A massive risk eliminated.
Any potential offtaker will get a discount for providing up front cash. Commod deals I've seen over the years ranged from around 1/4 off to 2/3rds dependent on many factors. Hopefully Atlantic achieve a small discount as it's not long to delivering.
Inevitable the early years bottom line will be hit compared to them getting unencumbered pricing. An example:
SC6 spot 1600, aic 800, deal size 100k/y over 5y, cash up front 60m.
Customer discount say 40% - ie for paying say 60m up front they get 100m off the spot over 5y. 20m/y ie pay 1400/t simplistically that will cut 1/4 off cash flow. That impact highly dependent on spot price. Many variations possible.
A deal should be on av good for valuation but a poor deal for Atlantic could be negative. They won't!!
Be a while then! Listing not till Q3
https://www.adomonline.com/atlantic-lithium-submits-application-to-list-on-gse/
With Tianqi, Ganfeng and SIGMA's doubling down down pressure on Atlantic today is no surprise.
The terms rather than who will be the big determinatior on the price reaction I reckon. To get 70 to 100m up front for a 500k supply dealwill mean either a decent discount to spot or a bargain fixed price for the offtaker, or a mix? How much will have a big impact on Atlantic's earnings over the 5 years of the deal.
I hope a decent amount will have a floor price that gives profit.
Looking forward
Https://youtu.be/dCorcsoYqyE?si=vuEmx-BbZKS6xVkI
Inciteful listen.
Https://youtu.be/i5moqnhHSE8?si=u55rF6eqT_Hoosb2
From 36 20 for Piedmont and some on Ewoyaa. Opinion: present LCE pricing makes Tennessee difficult....but also it is to rise.
Bit of a trend?
https://www.yicaiglobal.com/news/chinas-lithium-carbonate-futures-surge-as-another-environmental-storm-looms
Piedmont have also said they are to apply for US gov finance for Ewoyaa others have already had awards for Africa projects. I see minimal concern re finding the cash there but there is some if sc6 pricing remains very depressed through to Piedmont's FID. They would have to think carefully whether to hold off for better times. Building Tennessee costs 5x more.
Can't see it but one has the worry.
FMU:
*ESG means nothing in China unless the West curtails imports. They could but they haven't apart from duties.
*DSO does go from Africa particularly Zimbabwe but is not in large enough volume to have a big price depressing impact.
*Chinese lepidolite does come out from the western desert and little doubt it is being subsidised by battery cos but production is slow in winter and I suspect is more talk than reality now.
Last day of Luna Holiday.restocking?
Rapidly growing market
https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/electric-power/021524-solar-battery-storage-to-dominate-new-electricity-generation-in-2024-eia
https://auroraer.com/insight/battery-markets-gb-italy-and-the-ireland-i-sem-lead-the-way-in-europe/
I somehow doubt they will walk (watch ALL crash to sub 5p then Assore offer 6 if they do) because for around a total outlay of some 170m they get 1.75mt of sc6eq...... 40.5% of Ewoyaa's value and 40.5% of Ewoyaa's distributions and uh 5% of a (yes it might well be worth 150p by then) Atlantic.
Missed owt?
ATB
40.5%