RE: Opening trade25 Jan 2025 23:50
The penny really dropped why we want primary and also the blending
Hmps feed cost 10.
Primary mining oxide feed 30
Magnet cost 40.
Each magnet you make you capture magnet margin of 10 (and they say little ex China knowledge)
Blending 25pct hpms with other primary feed. You can make 4x magnets with same HPMS feed, and thus get the magnet margin 4 times not 1 on a pure hpms magnet.
So really this is a magnet making business.
Also you have price support. If prices in the mining side fall, we can always make money as blending with hpms makes the input cost bearable. And if we can keep producing magnets we keep getting the magnet margin.
Also by producing more magnets we can become more entrenched with our OEM customers.
The second insight was nice for me ( 10 of the questions were mine). The comparison vs long loop
1. The comments on economies of scale is golden.
For strategic capital efficency.
Maybe for 100m they can enter 1 market, we could maybe start small In 3.
We can enter markers with less supply currently, any market we enter requires less agreements before executing.
So really we can start building the business faster and wider and capture the key OEM relationships.
They never mentioned the size of plant for long loop so clearly before.
If you combine being able to use small plants, and thr factors most supply is electric waste they cannot touch it is really an open door to easy first adopter expansion
Our model is strategically capital efficient. Long loop maybe for 100m usd can enter 1 market. They need lots of
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