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Last edited 2 months ago

I took small positions on 3 next-generation mining companies. One of them is Piedmont Lithium. There is plenty of excellent research out there on strawman and youtube. Not gonna lie, the prime reason I invested in Piedmont is the Tesla supply deal. As a Tesla shareholder, the amount of raw materials that they need is enormous to meet the 100GWh target in 2022. The main ingredient for batteries is Lithium and most of you reading this straw must have watched battery day. Lithium is used in all chemistries for EV's (Iron Phosphate to High Nickel). The major theme for Tesla is localising the supply chain, watch Rock Stock channel and EV stock channel on Youtube where lithium mining experts draw out the supply chain for batteries. 

Piedmont located in North Carolina, USA has hard rock spodumene concentrate which is essential to make LiOH (lithium Hydroxide). Lithium Hydroxide is used for high energy density batteries, so batteries with high Nickel cathodes. The types of vehicles suited for this type of chemistry is the Tesla Semi and the Cybertruck. They are large vehicles and need plenty of batteries. Furthermore, Tesla's new gigafactory in Texas will have a cathode plant for hydroxide conversion. So Tesla only needs the lithium so they can convert it to LiOH using a sulfate-free process explained on Battery day. Piedmont is close by and is expected to supply Tesla ~ 50,000t p.a. which is 1/3 of what they aim to produce. It is a 5-year fixed-price contract with deliveries to commence between July 2022 and July 2023. By then, the Texas Gigafactory and the cathode plant would be completed. Sales agreement create incentives for mining companies like Piedmont to proceed with the project. 

I am not a big fan of mining companies, but since I own Tesla, I am forced to understand what goes inside a battery. Youtube channel The Limiting Factor is one of my favourites. Lithium projects are extremely important for EV companies as they have to secure supply now for the exponential demand in the next 4 years. It is amazing that Youtube and Twitter have become a source of information for understanding the battery industry. 

The DFS is the next stage for the company and is expected to be completed mid-2021. Piedmont is also building their own hydroxide plant in North Carolina, I am assuming this is to cater to customers outside of Tesla. They invested in Sayona Quebec to supply Piedmont with the greater of 60,000t p.a. or 50% of Sayona Quebec's spodumene concentrate production. The contract with Tesla is an initial one if Tesla becomes the largest automaker as I think they will, then they would need more lithium. 

For a very small weighting on the portfolio for large upside opportunity for the next 5 years, Piedmont fits my risk profile. In saying that, we don't know how they would fare during production so it is very risky. Hence the straw is aptly named speculative.                            

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#ASX Announcements
Last edited 7 months ago

Shares in Australian junior Piedmont Lithium (ASX: PLL) surged almost 84% on Monday in Sydney after it confirmed it had signed a sales agreement with Tesla to supply the electric vehicle maker with high-purity lithium ore mineral for up to ten years.

Piedmont accidentally released the announcement last week, following the hyped “Tesla Battery Days,” but the Australian Stock Exchange said it would not publish it then.

The initial five-year agreement will see Piedmont supplying about a third of its planned 160,000-tonnes-per-year spodumene concentrate from its deposits in North Carolina. Both companies can then extend the contract for another five years.

Piedmont president and chief executive officer, Keith Phillips, said the deal represented the start of the first domestic lithium supply chain in the United States.

“We will now accelerate our mine/concentrator development to support Tesla’s plans, work to further expand our mineral resources, and potentially increase our planned annual spodumene concentrate production capacity,” Phillips said in the statement.

The deal is conditional upon both companies agreeing to start deliveries between July 2022 and July 2023, Piedmont Lithium said.

Did we miss out on this one? disclaimer this stock wasn't even on my radar. 

full artical here;

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