Why is this GREAT news?
Nobody even considered South Korean Posco (A steel making company?) to get involved in Lithium. Again another surprising off-take agreement that nobody saw coming. Great for the Lithium sector. Negative Supply/Demand predictions are looking seriously questionable.
TO PUT THIS ANNOUNCEMENT IN PERSPECTIVE
Well done to PLS management. PLS will purchase 30% of the POSCO downstream processing plant - which means 0.3 x 30kt lithium concentrate = 9 kt out of its 250kt operation. So PLS is looking at buying into downstreaming 3.6% of it's product. Better than 0%. Unlike SQM however, Posco has no experience in building and running lithium processing plants and as much as PLS would love to be in retrospect (it has too much unprocessed lithium in binding offtakes already), PLS is not a fully integrated Lithium operation.
KDR will be FULLY integrated for downstream processing. It has the technological know-how of lithium giant SQM for end product down-stream processing. SQM is known for never missing a deadline, getting things done on-time and on budget. This will be a massive value-add for KDR's operation that other juniors are looking at with envy.
With resource upgrade pending, Lithium hydroxide coming to the fore as the go-to end product, and more positive news flow for KDR and the sector on the way, KDR is sitting pretty for a big re-rate. Hold on to your seats (and shares) my fellow KDR holders - and if you aren't on the boat but are thinking of pulling the trigger, it's not too late to get on-board! Good luck to all!
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