Rock Stock Channel

Albemarle looks vulnerable for opportunistic takeover. Valuation (down ~50%) reflects Mr. Market pricing in today’s China spot carbonate price as the long-term reference point, rather than ALB’s more profitable long-term hydroxide price with floors from reliable non-Chinese counter-parties.

In Part Two of Lithium-ion Rocks exclusive interview with KISSam Luke - the leader of the world’s largest lithium producer - Howard Klein and Rodney Hooper ask about such M&A possibility and whether management/board are considering insider buying at current prices?
 Additionally:

What LiOH pricing did ALB assume for its Wodgina JV to achieve 2X cost of capital? What is expected timing and pricing for $1B+ bond deal later this year for Wodgina JV? What are ALB's top two most important investment criteria for lithium investment? Might ALB deploy Ganfeng-like strategy in partnering with juniors via off-take agreements? After investing "tens of millions" evaluating King’s Mountain North Carolina what has ALB learned about the quality and size of that past-producing asset and the likelihood/timing that the Carolina Tin-Spodumene belt will again become an important part of USA and global lithium supply?

PLUS: Chris Kapsch of Loop Capital

Is lithium a specialty chemical or commodity chemical? What does that really mean for $ALB long-term profit margin and Mr. Market earnings/EBITDA multiple? With Tier One harbrock (Talison) and brine (Atacama), ALB is positioned as the "baseload supplier" to "Tier One" Battery and Cathode producers outside China. Does this justify premium valuation to peers? Where does ALB & other lithium producers sit relative to broader “Specialty Chemicals” investment universe?

ALB now attracting traditional Value funds, compared to prior interest from Growth and GARP investors - what are their top questions?

What are the dynamics in ALB's bromine and catalyst business? Might we see a positive or negative surprise from these Oligopolistic businesses supporting ALB's lithium growth investments?

Not Investment Advice. DYOR

May 30, 2019. Luther “Luke” Kissam IV, Albemarle’s Chairman, CEO & President speaks with Howard Klein from $ALB's Charlotte, North Carolina headquarters with Rodney Hooper dialed in. LithiumIonRocks will publish the co-hosts' candid questioning over a three-part series of exclusive podcasts, each with an additional complementary guest.

In today’s Part One, we discuss with the leader of the world’s largest and highly profitable lithium producer the current state of the still nascent and immature lithium industry, Albemarle’s place within it, and its aggressive investments - substantially focused on lithium hydroxide - to meet unprecedented 15-20% annual demand growth from increased Electric Vehicle adoption.

What does Luke think about what Mr. Market is saying about ALB - trading at ~7X 2020 EV/EBITDA down some 50% from last year’s high, essentially flat since Luke assumed the CEO role in 2011, and only marginally up since ALB's 2015 purchase of Rockwood at 14.4X LTM EV/EBITDA?

Will hydroxide demand overtake carbonate demand and when? Will hydroxide maintain its price premium to carbonate? How does Luke think about unconventional clay and geothermal projects? Thoughts on Livent, Orocobre? Buy vs. Build Kings Mountain North Carolina or Antofalla, Argentina? As an S&P 500 constituent and Goldman Sachs SUSTAIN 50 name, Luke comments on Sustainability considerations in general and via yield enhancement equipment being implemented in Chile.

#WarmingUpToChile

As much of the lithium industry heads to Santiago Chile for the flagship Fast Markets 11th Annual Lithium Supply and Markets conference - and tours both ALB and SQM’s Atacama brine salars - LithiumIonRocks also profiles the state of play in Chile. Cristobal Garcia Huidobro, CEO of Lithium Power International (LPI) & Tim McKenna - ex Rockwood VP of IR and Government relations, now with Piedmont Lithium in North Carolina - discuss the brine vs. hard rock debate and investor perceptions (and misperceptions) about Chile’s lithium investment climate for producers like SQM and ALB as well as advanced development projects like LPI’s Maricunga.

Not Investment Advice. DYOR.

Ganfeng Lithium’s US$30M prospective investment and off-take agreement with Bacanora Lithium is a very consequential deal.

Providing operational and, by our estimates, up to $150M in equity support, "Off-take Partner of First Resort" Ganfeng is once again taking astute, calculated risk with a large, long-lived clay asset that by any definition should be considered World Class.

Bacanora - advised by Citi and Canaccord - and its Sonora Lithium project, with Ganfeng, Hanwa, Red Kite and other large institutional support could be fully funded by end 2019 with targeted fast track Stage One production of 17,500t lithium carbonate by 2021.

#LithiumIonRocks co-hosts Howard Klein and Rodney Hooper dive deep with successful project developer and Bacanora CEO Peter Secker who outlines the background, deal details and what to expect over the next few months in what is yet another important strategic relationship for Ganfeng in another new Western Hemisphere emerging market jurisdiction.

We also preview next week’s pilgrimage to Santiago, Chile for the Lithium Industry’s flagship @Fastmarkets 11th Annual Lithium Supply Conference.

PLUS

LithiumIonRocks First Ever Contest & Giveaway. “Who Can It Be Now?”

That is, our upcoming E15 guest - a serious player in the lithium industry.

Tune it to hear more about the contest and giveaway!

And, for further reading:

P.S. I Like Soft Rock - “Clay Will Have Its Day” @LithiumIonBull November 2017.

docs.wixstatic.com/ugd/affbaa_cb1a…79af63983d1.pdf

Not Advice. DYOR

As the Benchmark Minerals' highly successful North American World Tour through Washington DC, to New York to Vancouver concluded into May Memorial Day weekends, LithiumIonRocks! Howard Klein and Rodney Hooper take a close look at the major DEMAND drivers underpinning the worlds most important lithium producers forecasting 1 million tons of lithium chemicals by 2025, a tripling in just 6 years.

Mega Battery factories & Mega Cathode factories require Mega Investment in brines, mines & chemical converters ASAP.

Podcast Index by Minutes

0-12:30LithiumIonBull banter with The Seeker, Rodney Hooper, now on Seeking Alpha. Germany/Europe is the New China. VW - Lithium, The Irreplaceable Element. Secure, Sustainable Hard Rock.

12:30-25 Adam Panayi, Rho Motion: Energy Density & EV Battery Chemistries

25-42Caspar Rawles, Benchmark Minerals: Hyper NCM Battery Growth = Hydroxide Supply Urgency

42-49 Vivas Kumar, Benchmark Minerals interviews by Investing News Network's Priscilla Barerra.

Mr. Pegmatite, Mark Calderwood, who literally wrote the book about plain vanilla spodumene hard rock lithium deposits, discusses Alliance Mineral Assets strategic placement with lithium industry stalwart dealmaker Galaxy and joint venture with rapidly growing private China Jianxi Special Electric Motor.

With little fanfare, $A40 (formerly Tawana) has rapidly put into production for only ~USD75M capex the highest quality, premium priced spodumene ramping to 240,000 - 300,000ta SC6, while developing an innovative down stream strategy requiring no capital cost for exposure to hydroxide chemical conversion economics.

Rodney and Howard dive deep with Mark over 30 minutes Q&A before bantering amongst themselves about myriad Mr. Market news; $ALB & $LTHM earnings calls; management changes at LTHM and $LAC; The Lithium-ion Bull Market Scoreboard & Material Girl/Like a Virgin Lithium Developer Checklist; Tianqi & Ganfeng equity rights issue & convertible bond in Hong Kong and Shenzen.

Securing America's Future Energy (SAFE) keynote speaker at Benchmark Minerals Washington DC Summit, Robbie Diamond shares his vision since founding this leading 20-person strong non-profit organization 15 years ago with a mission to migrate USA away from its dependence on oil, especially as a transportation fuel. Electric and Autonomous Vehicles have been key to that objective.

USA National Security - in particular the rise and threat of reliance on China across the critical minerals through EV & Energy Storage supply chain - has become an important third leg to Keep America SAFE, alongside climate and decreased oil imports - in building bi-partisan consensus in Washington for a more pro-active response to ensure continued USA leadership of the Commanding Heights in Transportation and Utility industries.

Inspired in part from a call from Jerry Garcia to motivate Dead Heads for the Rainforest, Robbie has inspired LithiumIonRocks! to call out to all Jane and George Battery Packs to go Truckin' with Robbie to Keep America SAFE.

Lithium Pioneer James Calaway, founder and ex-Chairman of Argentina/Japan-focused Orocobre and now on a second lithium tour of duty as Chairman of ioneer, a leading American lithium and boron project in Nevada, shares his perspective after a morning keynote speech and day of high-level USA government talks at Benchmark Minerals Washington DC summit "Securing 21st Century US Supply Chains for EVS & Energy Storage."

A serial and accomplished entrepreneur and project developer, Sweet Baby James, Capital Structure Calaway discusses the "un-level playing field" in which US developers compete from a cost of capital perspective, based on the hand-in-glove relationship he sees between industry and government in China, Korea & Japan for the EV/Storage thematic and its implications throughout the entire raw material-to-EV supply chain.

The USA lithium landscape has many potential projects but the opportunity set is quite varied by resource type and therefore risk. James helps frame the opportunity set into four separate buckets and the relative considerations - technical and otherwise - in each bucket.

He also raises some specific policy ideas for where some small government involvement can help level the playing field from a cost-of-capital perspective with America's Asian competitors.

ALSO: Ken Brinsden Part 3 + Fast Markets' Martim Facada.

How is the SC6%-to-lithium chemical market similar/different from Fe 62/65%-to-steel industry? Why does it make more sense for SC6 producers to participate in downstream chemical production? What makes lithium "special" and not "commoditized"? Why POSCO? And Korea Inc vs. China?

Tune in to hear Pilbara's Ken Brinsden views on these questions in Part 3 of our interview.

PLUS - Lithium price reporter Martim Facada provides Fast Markets commentary following their recent Shanghai conference and ahead of their flagship Lithium Supply Conference in Santiago Chile June 10-12

And LithiumIonRocks co-host Rodney Hooper shares some of his own new supply and demand analysis which paints a far less pessimistic oversupply picture with a 12-24 month view.

What's the outlook for spodumene 6% prices? Conversion capacity in China?

Will Pilgangoora-branded SC6 garner price premium with long-term strategic partners?

In part two of three with Pilbara Minerals' Ken Brinsden, Rodney dives deep into these and operational questions such as Pilgangoora's high quality LOW IRON complement to ultra pure SC6.

Rodney also interviews Piedmont Lithium's CEO Keith Phillips and General Manager Patrick Brindle covering expanded acreage, high grade intercepts, permitting and path to construction decision by year end in North Carolina, USA.

Keith also discusses PLL's unique Nasdaq/ASX stock listing and growth of Jane and George Battery Pack USA investors, increasing average daily trading liquidity on both exchanges.

$PLS $PLL2Ps in an iPod.

Not Investment Advice. DYOR. Read Disclaimer

Visit: libull.com

You asked, we answered!!

More banter from Rodney & Howard amidst a flurry of news to end Q1 and begin Q2 with a far brighter outlook than looked possible at the start of the year.

To help you navigate through 67 minutes of pure #LithiumIonRocks! bliss, here's an index of what you'll hear:

Minute

0 - 7:30 - Introduction. Thoughts on Ganfeng/LAC7:30 - 24:30 - Real Vision Talks Lithium Bull. ALB, LTHM, PLL24:30 -33:30 - Ken Brinsden & the Thrilla in The Pilbara. PLS33:30 - 39:30 - Rodney Debunks Fuzzy Demand Math @MorganStanley39:30-41:30 - Developing Brine Projects - NLC, LPI, LAC41:30-43 - VW & European Lithium Sustainability/Security - SAV, BCN, INF43-48 - Dissecting Fellow Lithium Bull from Cormark & Canaccord48-60 - USA Lithium Security of Supply: Hard Rock PLL, INR & the others60-68 - Volkswagen Verbatim. Battery Arms Race Meet Scramble for Lithium @Benchmarkmin @FT

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Not Investment Advice. DYOR.