RE: Zim1 Dec 2023 16:56
Speccy,
as he says we have three ways of supplying material for export: buy it in, use our stockpiles or produce it.
The view is the price drop is temporary and will reverse once the destocking is complete.
If you listen carefully, what he is saying is that we ship to China and sell in China at spot or a premium to spot. We don't need an offtaker if we are selling at spot to whoever gives us the best price. Entering into an offtake agreement introduces another complexity and risk. When the volumes being shipped are much larger then maybe ALR enters into an offtake agreement but they are not a one way deal and they are not without risk.
If we can currently buy below cost of production, why produce?
Two things matter short term: 1. Can we export and 2. can we sell in China at a profit? We have proved the first and we await the second.
He has said quite clearly that he sees ALR as a large business in due course: time will tell.
I have said several times that carbonate is where it is at not spodumene and, hey presto, the Zim Govt agrees.
ALR is well positioned, mainly because it has not wasted loads of money on plants that are now redundant or will be fairly shortly. But additionally, it has not spent a lot of money drilling out a resource that no one will want shortly.
Our licences are not affected by the new rules. For carbonate it is better to use lepidolite rather than spodumene.
Listen to what he says, read the RNSs and Tweets and then do your research.
As usual the trolls will do what they always do and have a fit about a ramp but look at my posts. The wrong thing to do would have been to build a plant, drill out a resource and enter into an offtake agreement that could not be fulfilled: see Prem for further details in due course.
DYOR
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