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"Ärgerzeiten" haben wir beim Lithium schon ganz andere mitgemacht, das gehört dazu!
Der Artikel handelt primär nicht um PLS, aber falls es Dich immer noch interessiert voilà:
(ich hoffe jetzt, muss Dir das nicht auch noch übersetzen ;-))
Billionaires v BHP in WA’s lithiumpower grab
No longer thespeculative domain of evangelical retail shareholders, the lithium sector haswon acceptance and trust from just about everyone except BHP.
Wagons piled high with iron ore rumble past the front gates ofthe Wodgina and Pilgangoora lithium mines more than 40 times a day.
Three railway lines owned by three different iron ore producerstrisect the 40 kilometre gap separating the two mines, but the trains don’tstop to pick up lithium.
In the mining mecca of the Pilbara, railway lines are statussymbols; owning one is a statement of permanence, profitability and primacy inan ancient landscape. Trucking ore to Port Hedland – as the Wodgina andPilgangoora owners do – is traditionally the domain of marginal opportunists.
They may not have railways, but the lithium sector that hasgrown under the nose of the iron ore oligarchs is rapidly coming of age.
Lithium miners no longer live on the speculative fringe, as theydid during the lithium boom of 2014-18. Pilgangoora’s owner Pilbara Minerals isnow a $13 billion company, up from about $400 million in March 2020.
The first boom was dominated by the penny stock developers of old tantalum mines, who enjoyed explosive share price gains by switching to the lithium that occurs with tantalum.
They were backed by evangelical armies of retail shareholders,who pumped money into the electric vehicle thematic much faster thanAustralia’s big miners, banks and most institutional investors.
The second lithium boom is almost three years old, having itsroots in the fiscal stimulus that was unleashed in late 2020, around the sametime Joe Biden was voted into the White House with an ambitious decarbonisationagenda.
Electric vehicle sales have been strong and the supply of lithium to the battery manufacturers has struggled to keep pace.
When prices for Australia’s lithium-rich spodumene concentrate touched $US6000 ($9288) a tonne on December 31, the price was almost six times the August 2018 peak.
Lithium’s second coming has been about delivery rather than potential.
“In 2017, Australia aspired to be a significant spodumene producer beyond Greenbushes,” said Joe Lowry, the American lithium industry adviser who has attracted a huge following among local retail investors.
“Now Australia is the most important lithium supplier in the world.”
A once fragmented industry is being rapidly consolidated by a powerful few, as illustrated by this month’s moves on pre-revenue Liontown Resources by Gina Rinehart and America’s biggest lithium producer, Albemarle.
If all goes to plan at Liontown’s Kathleen Valley, next year it will join the ranks of Australian lithium miners delivering multi-billion dollar profits and fully franked dividends. That’s giving the more cautious institutional investors confidence to back a sector they ignored the first time around.
But the lithium sector’s journey toward legitimacy faces a challenge: BHP, the ASX’s biggest company, just happens to be the mining industry’s biggest lithium bear.
“Are they still saying that?” quipped Pilbara Minerals boss Dale Henderson on February 9, on the sidelines of the Melbourne Mining Club.
Henderson had been asked about BHP’s long-held view that lithium is not a lucrative way to play the battery and electric vehicle thematic.
Two weeks later Pilgangoora delivered a $1.24 billion interim profit and a maiden interim dividend for Pilbara shareholders.
BHP, which owns one of the three railway lines that run past thePilgangoora gate, first signalled its lack of interest in lithium in December2017, when then-chief Andrew Mackenzie told the Melbourne Mining Club thatcopper would be a better EV bet.
Prices for the red metal are about 44 per cent higher sincethen.
BHP’s thinking is that abundant supply of lithium and expansionplans from giants such as Albemarle and Chile’s SQM will mean slim profitmargins.
BHP’s view of lithium has barely changed. Chief executive Mike Henry told shareholders in April that strong forecast demand was not enough to convince BHP to invest in lithium.
“There has to be sufficient scale in the industry for it to be a needle-mover for BHP,” he said.
“It has to afford the opportunity through the shape of the cost curve, the difference between the high-cost players and the low-cost players to generate attractive margins over time.”
Tony Ottaviano is familiar with BHP’s view; he spent 18 years at the company before leaving to run Liontown in 2021.
“We beg to disagree,” Ottaviano said in May.
But the challenge for lithium stocks such as Liontown, Pilbara Minerals and the owner of the Wodgina mine – Mineral Resources – is that fund managers tend to believe BHP.
BHP, for example, is the single-biggest holding of the95-year-old Australian Foundation Investment Company, which held no lithiumstocks at June 30.
The 77-year-old Argo Investments counts BHP as itssecond-biggest holding.
Such investors have traditionally preferred to buy mature,low-risk businesses that can pay reliable, fully franked dividends.
That approach has made them slower to embrace lithium thaninvestors such as AustralianSuper, which was an early mover into battery minerals after poaching two small-cap specialists in 2015: former Canaccord analyst Luke Smith; and former Goldman Sachs analyst George Batsakis.
That’s probably fair,” said Argo’s Andy Forster, of theproposition that he missed the first lithium boom.
But Forster says Argo got interested in the lithium “bust” ofmid-2018-20, when supply overwhelmed demand as EV sales in China slowed.
“We just thought, ‘Wow, there is going to be an enormous demandfor the whole energy transition, trying to decarbonise, battery storage. Whatis the best way to play this?’ We thought lithium,” he says.
Argo’s first move was IGO, the well established nickel minerthat announced plans to buy its way into Australia’s biggest and best lithium mine at Greenbushes in WA in December 2020.
Through the Greenbushes transaction, IGO created the kind ofASX-listed lithium miner that yield-focused, institutional investors couldembrace.
Historically, we like businesses thatcan grow over time and have the ability to pay dividends, so for us IGO was ourfirst foray into the lithium space because, at the end of the day, weidentified that Greenbushes was probably the best mine globally,” says Forster.
“Regardless of the cycle, that mineshould make money for us.”
Argo made a higher-risk choice when itlater invested in Liontown.
“From a resource perspective, itlooked pretty strategic; the size of it, the location.”
Albemarle also saw the “strategic”potential of Liontown’s Kathleen Valley lithium discovery, which is locatedless than 30 kilometres from where BHP has mined nickel at Mt Keith for thepast 18 years.
Albemarle made three attempts toacquire Liontown in the months prior to its $2.50 a share offer being made public in March. Albemarle returned with a $3 offer onSeptember 4 and won backing from the Liontown board.
Enter Gina Rinehart, who snapped upmore than 7 per cent of Liontown shares this week, pushing them past the offerprice.
Rinehart – who incidentally isthe biggest shareholder in one of the railways that runs between thePilgangoora and Wodgina mines – hinted she may attempt to block Albemarle’s takeover unless given an opportunity to get involved in Liontown’s future.
Albemarle already owns half ofGreenbushes and half of the Wodgina mine in the Pilbara.
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Its move on Liontown continues anM&A frenzy that saw it pay $30 million for undeveloped tenements close toGreenbushes and also grab a strategic stake in Canadian lithium upstart Patriot Battery Metals.
ASX-listed Allkem inked a $US10 billion merger with US lithium company Livent in May, while SQM tried to acquire WA lithiumexplorer Azure Minerals in August.
Albemarle’s partner in the Wodginamine, MinRes, helped a related party, Develop Global, lob a friendly takeoverbid for WA lithium explorer Essential Metals in July.
MinRes has grabbed 17.44 per cent ofWA explorer Delta Lithium, a further 9.6 per cent of rival WA explorer GlobalLithium, and is also trying to buy WA’s Bald Hill lithium mine out ofreceivership.
MinRes also owns half of thesix-year-old Mt Marion lithium mine, located about 20 kilometres from theKambalda nickel business BHP has run for 18 years.
While BHP talks about abundantsupplies of lithium depressing producer margins, miners such as MinRes,Albemarle, SQM and Rinehart are scrambling to get a strategic stake in justabout any lithium resource they can find.
Albemarle chief financial officerScott Tozier told analysts on August 3 that Albemarle had tweaked its M&Astrategy to focus more on undeveloped projects.
“There’s more risk in that. But we aretaking smaller stakes to get our foot in the door, so to speak, and then itallows us to get information and analyse the opportunity as it develops.”
When MinRes managing director andbillionaire Chris Ellison was asked about the overriding strategy behind hisflurry of lithium deals, he was more guarded than Albemarle.
“Strategy? We kind of make it up as wego along,” he deadpanned.
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Azure boss Tony Rovira reckons thesector is witnessing a consolidation phase that could shape the Australianlithium market for generations.
“I think the lithium industry willbecome similar to the iron ore industry where there will be a few majorcompanies who will basically control all of the mining production,” hetold The Australian Financial Review this week.
After politely dismissing BHP’s viewthat lithium will not be a lucrative earner, Ottaviano sought to impress uponthe audience at The Financial Review Mining Summit in May that some of BHP’s big peers were keen on lithium.
“Rio has a different perspective.They’re very strong in this commodity,” he said, with a nod to the fact RioTinto wants to develop lithium projects in Argentina, Serbia and California.
Glencore boss Gary Nagle also madeclear earlier this year that he had no desire to get into lithium in a seriousway.
Glencore already trades small volumesof lithium. It is understood to be financially supporting buyout funds thatwant to buy the WA Bald Hill mine out of receivership.
“It is not a supply constrainedcommodity, so [it’s] not something that we like and there is no intention atthis stage to look at any equity investments or operations of mines,” Nagletold analysts.
Industry specialist Lowry reckonsTesla talisman Elon Musk has been influential in propagating the view oflithium that Glencore and BHP espouse.
“I guess they aren’t immune to Elon’s‘lithium is everywhere’ narrative that benefits Tesla. Of course lithium isabundant but economically producible lithium in jurisdictions that enable rapiddevelopment is relatively rare,” he says.
Argo’s Forster agrees strongly withBHP’s view that copper – still a much bigger industry than lithium – will be alucrative sector, as waning mine supply chafes against strong demand from aworld that will rapidly electrify its cars and homes.
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As for nickel and lithium, Forster isless swayed by BHP’s conviction.
“Nickel is going to be hard to movethe dial for them,” he says, in reference to the fact nickel provided just$US57 million of BHP’s $US22.8 billion of underlying earnings before interestand tax last year.
“I can’t see them going into lithium,we have certainly questioned them a number of times over the years on that.
“Some of those [lithium] companies areactually paying pretty good dividends. IGO and Pilbara are paying pretty gooddividends, Mineral Resources are paying dividends as well.
“I am sure it will go through boom andbust again, because there is no shortage of projects that are trying to comeon. But it is not necessarily that easy to bring projects on and deliver themto expectations.
“I respect [BHP] for sticking to theirguns.”
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