Rodney Hooper #01 - Investing Basics for Lithium: What to Focus On (Transcript)

August 25 2020, 09:40 GMT+01:00
Stay ahead of the pack by listening to this conversation with Rodney Hooper, Research and Corporate Advisor and Co-Host of "Lithium-ionRocks!" Podcast

This is quite an entry-level interview that covers the basics of the lithium space and lithium investment tenets. However, it also serves as a useful reminder to established lithium investors about what they should be focussed on. It is easy to get side-tracked when investing in mining, so what components of lithium should you be focused on? We get a few clues in this conversation.

Rodney Hooper works for a consultancy firm called RK Equity. The company focussed on lithium and other battery metals with an outlook towards the exciting future growth opportunity created by the EV revolution.

Hooper chimes in on the popular debate regarding the pros and cons of lithium brine, clay, hard-rock, hydroxides, carbonates and spodumene. That is the technical side of lithium covered. Then, we move into the commercial side of lithium investment. What sort of lithium companies should investors be looking to throw their money at?

We take a good look at the fundamentals of successful lithium explorers, developers and producers. Which partnerships are key for lithium players? How can lithium players capitalise in the current depressed marketplace?

We Discuss:

  • 2:06 - Coping with COVID-19: Bans and Society
  • 5:08 - Rodney's Background
  • 8:17 - Back to Basics: In-Depth Look at Lithium
  • 14:04 - Size of Market and Implications for Growth
  • 15:02 - Know What Good Looks Like: Criteria for Success
  • 22:18 - Cost Structures for Different Types of Lithium
  • 26:02 - Do Your Homework: Where Does Value Lie?
  • 28:24 - Misunderstood Clay: Young Tech and Possibilities
  • 34:59 - Nickel's Role in the EV Thematic

Matthew Gordon: Rodney, how are you doing, sir?

Rodney Hooper: Good, and you, Matt?

Matthew Gordon: Yes, not too bad. Not too bad. You're calling us from South Africa. How are things there?

Rodney Hooper: I'm calling from Cape town. We're in mid-winter not midsummer like you, and like everyone else trying to cope with COVID.

Matthew Gordon: And how are you coping with COVID? What's that like?

Rodney Hooper: For me personally, I've always worked from home and then travelled. So the travel bit, of course, has been impaired, but yes, South Africa; it's not often we rank fourth on the list, and we ranked 4th in total cases in COVID. I'm trying to get that under control.

Matthew Gordon: It's not good. And there's a real expense to that as well. Isn't it? That's the bit that people forget. How is South Africa coping?

Rodney Hooper: We've set aside quite a large support fund, but the balance sheet, isn't that of the US and the UK. We recently got a loan of about USD$4.3Bn from the IMF, but we have some fairly tough measures in place here in South Africa. We've got curfews, we've got bans on alcohol and cigarettes sales. It's been really difficult for certain sectors.

Matthew Gordon: That's quite serious: curfews but why the ban on alcohol and cigarettes?

Rodney Hooper The cigarette ban was around respiratory, believing it to be respiratory-related. But the interesting thing is that British American Tobacco, obviously losing sales that its own survey and and came up with the numbers that about 95% of smokers are still getting cigarettes, just illegally, so no government the taxes are being paid on the sale. And then the other issue, which I found really interesting is they said because of the cost under the black market, which can be as much as 4x to 5x the normal price that people are sharing cigarettes, and then of course, that poses a risk of passing on COVID.

On the alcohol side, what the hospitals were finding, particularly in the regional areas where they don't have big hospitals, is they were facing an enormous increase in alcohol-related violence. So emergency beds were being filled up with non-COVID related patients to the point that they were putting lives at risk. They took the view to ban alcohol sales. Again, we've been open, so it's not like they didn't have the stats. We were closed and then open and now we're closed off again.

Matthew Gordon: We've instigated 14-day quarantine for people coming back from Spain to the UK because there has been an outbreak there. Melbourne in Australia - the same, and the States as well is a whole, whole other story.

Well, we're not here to talk about COVID we're here to talk about Lithium – something you know a lot about. We had Howard Klein on recently, your business partner. You guys focus on Lithium. Maybe give people a bit of background about yourself.

Rodney Hooper It was an interesting one. Being South African mining has always been part and parcel of our history, and I've dealt in other areas in different shapes and forms, but a few years ago, I had a look at the landscape. I actually did an in-depth thesis for a family office on oil, which turned out to be successful at the time. If you remember: oil plummeted into the $20s back then, but I did quite a lot of research around the threats and risks to the future demand for oil, and came across Lithium. Now, in South Africa a lot of the companies were hoping that fuel cells would come through because that needs platinum. But it was around the time that Elon Musk was emerging and the potential for, specifically for electric vehicles, was becoming apparent because the cost of renewables was plummeting.

So the potential to have a closed loop of batteries and charging using clean energy was starting to form. And looking amongst the energy vehicle battery metals, and I still think there's some good prospects in others, but Lithium is the irreplaceable element of the Lithium-ion battery. And in terms of impact on size of market and shifts going forward, Lithium is the most impacted of the EV battery metals.

So for the last 4-years, I've literally 7-days a week, 15-hours a day, just gone down the Lithium wormhole and never come out. It's a very nuanced industry and complicated. And I have spent that time literally dedicated. We do cover the EV battery metal space, but Lithium has dominated our work. And we've worked with a lot of company and people and we speak to the Lithium battery supply chain from spodumene from the precursor providers, right to the other end of the supply chain. We chat to everyone and have a fairly good handle on everything that is happening across the space.

Matthew Gordon: You're spending a lot of your time involved with Lithium and you provide analysis and do consultancy work for us companies. You are really involved with it. I want to start from the beginning though, because there's quite a few people, who made money on Lithium about 2, 3-years ago, and then the price dropped off. But they're starting to look at it again. The EV thematic is starting to grow. Lithium is coming back on the agenda. If you don't mind, we're going to go back to basics:  let's start with terminology first of all. You mentioned spodumene. There's also hydroxide and carbonate. So maybe you can describe what each of those things is?

Rodney Hooper: People must understand is that the Lithium industry didn't start and evolve, it has been going since the ‘1950s in the States. It didn't start with the basis of supplying electric vehicles. Lithium started out, as an example in one of the places that you can produce Lithium is out of brine. South American brine was a by-product of potassium. And so one of the things that people need to understand, and it's something that we'll discuss as we move forward from here, is the quality of Lithium that is required to supply the industrial market, which is the history of Lithium, which is grease, glass, ceramics, is not the same as what is required in the battery industry. The purity levels are completely separate products. When people think of Lithium as a commodity, it might have some merit in looking at it in that shape and form for the historical industrial applications, but for the battery industry, it's very much a specialty chemical.

Matthew Gordon: It's been around a long time. There are other uses, which probably make up the bulk of the market at the moment. But investors are getting excited for companies based on what they're hearing around the battery thematic, what automotives are going to be doing going forward

Rodney Hooper: The historic application is very much GDP growth related industries. They are linked to industrial applications and they're GDP-related. The excitement is around the Lithium-ion battery industry, which is going to compound at, call it 25%, 30%. And that's unprecedented. So when people say Lithium is abundant, Lithium is abundant, but so is Nickel, so are other things, but can you commercially extract it and can you produce the product that's needed? And it's one of the stumbling blocks in investors’ mentality looking at it, is they don't consider the nuance of what it is to produce a product that has sometimes 10 parts per million. You need impurities at less than 10ppm (parts per million) of a product. It really requires a specialty process and that's where the margins are at and that's the excitement.

Lithium started out in the US, it was based on hard-rock. It was mostly spodumene-based material. You process that into Lithium chemicals. Then in the ‘1980s the brine opportunity arose in South America, and the US pretty much shut down and it went to South America and then back again, Green Bushes in Western Australia saw the rise hard rock money, again. So from a brine perspective, the sun and the wind does a lot of the processing for you. It upgrades the Lithium content in the brine without having to do anything. So from a carbon footprint perspective, brine is actually quite low, but you need an enormous amount of land footprint to have ponds as you pump it up and then move them from one to the other, increasing the grade. And the issue that is always raised, and it has been raised now again in Chile, is what is the impact on the sustainability and the impact on the local community and flora and fauna of pumping brine out from under the surface. But typically, a brine will be processed into Lithium carbonate, you can do chloride as well, from a battery perspective, which is really where we focus in this conversation, is you make a Lithium carbonate. You can reprocess that into hydroxide, but it's an initial step, and then a secondary step. The other way to make Lithium is hard rock spodumene concentrate, you dig up Lithium oxide. It's mostly in Oz, but there's other places, like Brazil. And you purify, you increase the grade of that to a 6% spodumene concentrate, and you ship that. It's pretty much exclusively done in China where you need 7.5t to 8t of spodumene concentrate to then put through a rotary kiln, sulfuric acid and you can produce carbonate, but is the preferred route for Lithium hydroxide.

Matthew Gordon: That's some of the terminology. And then also some of the history around this. Can you give us a idea of the size of the current markets and projected for each of those?

Rodney Hooper: The total Lithium market is just over 300,000t. If you assume an average of USD$10,000/t, it's a USD$3Bn market. You compare that to Nickel – it is tiny. This is the complexity of what we're dealing with. It was a very small industry. And now of course, with batteries, we're expecting the size of that market to grow like 10x in the next 10-years.

Matthew Gordon: Seeing 10x potential growth, from the demand side of things, investors are going to get very excited about Lithium, especially with such small market. A USD$3Bn market is nothing. But if you suddenly become USD$30Bn over a relatively short period of time, that gets people excited. It gets investors excited if they can pick the right company. You touched upon a few things: Brines - +/- . Hardrock - long history. Where should people be looking? Should they be put off by brines or hard-rock, or even clay's?

Rodney Hooper: If I can simplify the Lithium thesis down to one thing, so you can start from there and then ask the question. The Lithium applications for industrial uses have GDP-like growth. So there's nothing sexy and exciting about that. They are good margin businesses, make no mistake, Albemarle - they do pharmaceuticals. They make good margins, but there's limited growth. You must only invest in a company that is going to achieve battery quality and qualified material into the EV and rechargeable battery supply chain. If the company that you back does not achieve that qualification, the margins that can be earned on supplying into the non-battery application and into the oversupply market, are not there. They don't justify the investment yet. So just as an example, if you look at Ganfeng, which is the world’s number 2. They are currently trading on an EV to EBITDA multiple of 70x, because there is no competition. The markets has been slightly oversupplied and tight, but they are able to literally take any material and turn it into battery quality material, and that skill, and that ability has a huge value to it.

Matthew Gordon: You touched upon that earlier. You talked about technology that is able to create high-grade , battery-grade materials. So companies that ‘talk’ about that is one thing, companies that are able to ‘deliver’ that is a completely different thing.

Rodney Hooper: If I can stop you there, there's even another qualification. So, producing battery grade, doesn't get you qualified. If you have the wrong impurities within your battery grade, such that it doesn't pass the battery supply chain qualification process, that material then has got to be sold into whatever market for whatever application. It still needs to be qualified. And each cathode maker has different impurities they don’t want. So that's why I said it's a rabbit hole - once you go down this thing, you never come out.

Matthew Gordon: This is really simplifying it for us, because it helps us point towards the right companies. Once we've identified companies that are saying the right things, how do we know if they've got the right battery-grade materials?

Rodney Hooper So here's an example: in our estimates as RK Equity, I've run through the numbers, because of the what EVs, the ex-China market want: they want high Nickel, cathodes, they want fast-charging, long-range that can only use if your cathode composition is more than, the tipping point is around 65% Nickel, then you can only use Lithium hydroxide in that cathode. You cannot use carbonates, it's to do with the centring process when they do it, it can damage the crystal structure. They are only really 3 qualified companies into the Lithium hydroxide markets outside of China, that's Albemarle, Ganfeng and Livent. There are other companies that supply smaller amounts, but those 3 are dominant. So when somebody says, I'm going to do X, Y, and Z, you've got to make sure that they're doing the right testing and, and they're going about it in the right way, because it's a very exclusive club that they are looking to join. And it's the reason why a lot of junior projects will partner with those three in order to get where they're going, or look to pinch personnel from them in order to get the job done.

Matthew Gordon: So if you're not one of those 3, you need to partner. This is good.

Rodney Hooper: You can go it alone. I mentioned Piedmont. They are based in North Carolina, and of all the Lithium hydroxide made Albemarle and Livent reprocessed carbonate in North Carolina. There's a lot of processing skill in that location. We are encouraged by new technologies, like direct Lithium extraction and clay, but they still need to go through the process and doing the pilot plants. It's one thing to do it at small scale. It's another to mine a much larger deposits that isn't homogenous. You have different waste rock, you have different ore body, how consistent is it, so that when you scale up from a pilot plant producing 100kg to 20,000t, is everything going to go according to plan? And that is mining really. In Lithium it's even more important because the allowed impurities, the specification sheets are extremely stringent.

Matthew Gordon: They are. And, as a small junior, you can't expect to have all the necessary prerequisite skillsets in-house, from exploration, development, building pilot plants, getting into some level of production and being able to sell into the right market. So again, so for investors, the opportunities are to get in early because the leverage is there, or get in at another point when you think that company has the necessary skillsets or partnerships, JVs, or relationships to process properly. What would you encourage people to be looking at in companies?

Rodney Hooper: If someone's going to be taken seriously, they're going to have a lot of chemical engineers and so on, on the staff, less promoters and less geologists. If they are going to progress from being an exploration or development company into a genuine production company.

But yes. That to me would be a key thing to look at. You've got to look at how rigorous the metallurgical test work is that people do. And also look at the qualification process. It starts with a few hundred grams then goes to a few kilos and then it goes to a ton: it's a real process. And you need to see how the guys progress along that chain.

Matthew Gordon: I want to bring it back to clays, brine, hardrock. There are different types of costs to those things. Brine is traditionally viewed as being quite inexpensive, low AISC if you were to produce. Hardrock is seen as much more expensive. If you were looking at these companies, how do you view them in terms of their different cost structures?

Rodney Hooper: So now I'm going to go down another wormhole with you: there is operating costs. Yes, brines typically are the lowest-cost producer for carbonate. SQM, it's under USD$3,000/t. But there are Royalties in Chile. So does one look at the operating costs or does one look at what the ultimate cost is in order to deliver the final product? Because that is what's going to generate your EBITDA and your earnings. If you ship into China there are import duties and VAT. And then if you ship out again as a foreign company, there is VAT on top of your product leaving it. There are cost curves and there are cost curves. And it's another added layer because if you just look at what operating costs are, and then you look at the financials that are released by companies, you wouldn't think that it’s the same people, because you're missing out on all of this hidden layer of expenses that happen between operating and sale.

From a pure operating perspective - yes. In theory, brine to carbonate, it is the lowest-cost route to the point that it's probably going to put a lot of the non-integrated producers in China who take independent spodumene and convert that to carbon, it's going to put them under pressure. And in theory, a hardrock to hydroxide is the cheapest route.

But it depends on whether you're integrated or non-integrated where you source it, and government royalty taxes and so on. Because again, Australia has a 5% royalty on spodumene and you ship it out to China and so on. We do a lot of work around what is the actual ultimate cost to produce the product, because investors need to know that in order to determine how profitable the company will be, which I'd like to think is what matters.

Matthew Gordon: Apart from Royalties, what are the other components?

Rodney Hooper: Obviously, the shipping, depending on where you're shipping it to. Argentina has an export tax. Chile has a Royalty on Albemarle and on SQM for what they set it to. If you ship it into China, there is import duty and VAT. And if you reprocess it and ship it out, there is another export tax or VAT, if you will, when you ship it out. So that's applicable to Livent and to Albemarle.

Matthew Gordon: So we need to start looking at financial modelling before we actually make some decisions.

Rodney Hooper: Yes. So it really does. It depends on where do you do your investing? If you like to take early exploration plays and run them to Feasibility, these things don't matter. if you're actually looking at worrying about operating companies and what the margins are, then these things do matter.

Matthew Gordon: It's an interesting mix for investors, because most of them don't do a lot of homework, and feel it doesn't really matter. And perhaps, early investing, based on what the company says, the promotion… it does have an effect, but it's not really going to move the dial when it comes to creating real value. You're saying you need to pick development companies with real chance of getting into production with some real partners. Is that where the best leverage is? The best value is? Early stage investing is risky by nature. Because they all say the same things. It's too early to actually have the data, the metrics be able to judge them properly. Where are you advising people to look?

Rodney Hooper That's a good one. We don't necessarily promote specific companies, but we will certainly do the analysis to give the ins and outs of each one and the merits. And obviously we represent companies that we believe in and achieve what's needed to be achieved,

Matthew Gordon: But generally, what's the best stage in terms of mitigating risk, but also increasing your leverage?

Rodney Hooper: That depends on where the market's at. That's a million dollar question, but where are the opportunities where you see the biggest returns happening? And this happens time and time again, through every cycle, that's from early exploration to proving up a resource and feasibility. There's always a big uplift there. And then the second opportunity is after Feasibility, around that orphan period where you get that next chance where they, in that 2-year construction period and there's no excitement around the hard work being done, but they're undervalued versus where they're headed to.

Matthew Gordon: So it's the same as every other commodity: there's no nuanced difference for Lithium?

Rodney Hooper: It's not how it's played out now, but the other thing to mention is unlike Copper or Nickel or what have you, there's no LME contract on Lithium. So there's no way to play the raw material. If you want to get exposure, you need to actually physically pick a company because you can't buy it as a commodity.

Matthew Gordon: I want to come back to clays, because it's relatively new to the market. I don't think it's really well understood and I'm not sure companies that we've spoken to or others have demonstrated technically how they can solve this problem at an economic scale. Where are they? Is it relatively nascent? Is it relatively young technology or do you think that people will be able to deliver a clay project at scale?

Rodney Hooper:  That's a tough question. So the one project that is being funded, and I saw you had them on the show, which is Bacanora. And again, the jury is out, but one way of maximizing the probability of achieving what you want to is having the right partner. And they've got Ganfeng. I can't sing the praises of Ganfeng enough - these guys have taken concentrate brine from SQM and turned it into battery material. They take spodumene from anywhere. They seem to get everything right, and they are Bacanora’s partners and they're having a go at the Sonora project. So I would say, if I've mentioned before that you need the due diligence of the chemicals skills and that's in conventional projects, in clay projects, you absolutely need to back a team and management and look to make sure that they have the right skills.

My preference on the clays would be to see some type of … Ganfeng will maximize your probability of getting it done. When it has proved to be as economically viable as the Feasibility Studies say that always remains to be seen. I've seen some Feasibility Studies already moving where the OPEX has jumped 50%. So, it's again, the one thing I would say that's possibly in its favour is I'd say it's a fairly homogenous deposit. In terms of what you're mining is fairly consistent. So if you can get the process right, you can probably start working at efficiencies because I don't think there's as many curve balls, but it is unproven.

There's a reason it's behind brine and behind hardrock in being tested. And it's worth being explored. It's worth being tested in the same way that I am quite partial to DIRE - to direct fm extraction. But I don't believe it's going to revolutionise CAPEX and OPEX but it could produce the material. It goes back to the question of who is going to produce battery quality and qualified Lithium into the supply chain, is people that can produce a consistent product time and time again.

Matthew Gordon: I take your point about Ganfeng and having them on board as a partner. For any company it is very important, in the case of clays, it increases the chance of success. It doesn't guarantee it because even they at this moment have not demonstrated economic economically viable solution for clays, that is to come

Rodney Hoope: Bacanora has run a pilot plant of about 600t a year. Again, it's going from that to 1,750t to 3,500t. Is there a mystery problem in the mix or is it going to be simply just scaling it up? Because Nemaska was supposed to do the same on its process. But you also can't underestimate the benefit of someone like Ganfeng with deep pockets and skills backing you so that if you do hit a few snags, it's not the end of the road for you. You can work your way through it. And that is important, all mining companies look for maximum leverage and maximum returns, but if they run into snags, is that the end of the road and you've been bought out in a fast sale, or do you keep going? Ganfeng is a USD$10Bn market cap company. It's real.

Matthew Gordon: I understand that. What I'm trying to get at is protecting investors, to walk in knowing what the risks are. And then you put that as part of your evaluation, your own personal evaluation, as to whether or not that's suits your strategy. It's just important to demystify the language used by certain companies. This is not a Bacanora conversation. This is generic conversation around what companies say they want and what the reality is are 2 different things. Because they have got to paint the best possible picture. You as an investor better not be walking into either a trap or a position where the company, despite its best endeavours, cannot solve a problem.

With Ganfeng and their balance sheet, it helps in that particular case. Not all companies have that. This whole exercise and this whole series is about helping people walk into investments with their eyes wide open. Thanks for talking about clays. It's an interesting space. If they solve the problem, potentially very huge for a handful of companies there.

Rodney Hooper: They don’t define or have a separate set of economics that's special to them. They've still got to make money in the environment like everyone else. And there is potential in the same with the others, but one must understand that the incumbent Lithium majors have not chased that space; take that for what you will. They had the choice and they've passed on it.

Matthew Gordon: But it comes back down to the technology. It's the uncertainty: you need to stick with what you know. 1 -it's a small market, even the major players are not that major. Capital is tight. The market has GDP like growth. It's not been that exciting. And the thematic has been a bit slow to materialise. It's ramping up, but it's still not there. COVID doesn't really help things either.

You did a commentary the other day on Nickel. You were interviewed about Nickel. And we've seen Tesla's quarterly. Last week we heard what Elon Musk said and the impact of that for certain companies as being huge because it's been hard to get a Tesla away from the Lithium story. They've suddenly just almost overnight recognised that Nickel is important to them. What was your take on his commentary with regards to Nickel?

Rodney Hooper: If do the breakdown of a, high-nickel cathode battery, the biggest expense of the entire of the high-Nickel cell is Nickel, and then second is Lithium. So, the way I see it is, if you look at Tesla, if he hits 500,000 sales this year, by our estimates, he is 25% of the EV market. For all the talk of Tesla killers, he might have increased his share of EVs this year. And it would appear that he has an ambition to continue to do that. What he's realised is, he is looking to expand Giga Nevada and Shanghai and start Berlin and Port Austin, which is already under construction as well. And if you are going to look to launch the semi, which could have anything up to 800Kw to 1,000Kw hour battery in it, which is like 15 model threes all in one. And the cyber truck, all of these need high-nickel cathode. And he said that because the semi is all about haulage weight . He needs the best energy density and last this way on his battery packs. I never thought he was going to look to launch all of those in one go. It would appear that he's looking to maintain a very high percentage of the EV market share. And he can if he launches. It depends on tastes, but the cyber truck looks to have a lot of back orders waiting for it.

So what is interesting is when he did make that comment, he made it almost quite clear that he's not going to do the Nickel mining, he's telling everyone else to get on with it. When he's spoken about getting into mining previously, he clearly didn't mean Nickel, because from the way I read that he's not going to do it.

 I do think one possible elegant solution to him securing more Nickel to do physical streaming deals, which is effectively like prepaid offtake with fixed pricing. Tesla is, let's assume it gets into the S&P 500. If you look at other companies in the S&P500 with USD$250Bn to USD$300Bn market cap, they have funding rates of like half a percent term funding rate. There is balance sheet arbitrage between the people who need the physical raw materials and junior miners. You have to borrow at 12%, 15%. I's not just about, you don't necessarily have to buy the company, but there are ways of structuring it, which you can effectively help fund the development of raw materials, which is where we're going to get to. A physical streaming deal with a fixed price guaranteed to him might be an elegant solution where he helps everyone. But in terms of raw quantum numbers, he's about to send Nickel and Lithium hydroxide demand into the stratosphere. If he is going to launch the semi, the Cyber, have the Y this year and the 3 back. It's going to require an insane amount of materials.

Matthew Gordon: It's an insane amount of material, but he also gave a clue about the type of Nickel he wants. He said, ‘you produce it, we'll give you a long-term contract, but it needs to be efficiently mined and it needs to be clean’. And there's this debate going on about sulphide versus laterite Nickel: dirty versus clean. And that is an interesting conversation. It's certainly for people like if Tesla's thinking that, are big funds thinking that? Should investors be thinking like that? Again, he puts something out there for debate.

Rodney Hooper: It would assume that it will favour high-grade Nickel sulphides with what he's asking. But in the end, this is a tall order with Nickel at $6/lbs, to have all these other requests of how you monitor and where you source your energy and what have you. And I've seen your Nickel expert on here. He can discuss it as it's quite a lot of requests going into the back of this when prices are quite low. So, it is possible to do it. And let's be honest: if you look at the price of renewables these days, it's a natural progression that's going to happen. And there's a lot of acidic waste rock, if you do that leaching on laterites and so on.

But what we've seen though is in the same light is he did an offtake agreement with Glencore for the Cobalts, and they also, they and BMW and others have offtake agreements with Ganfeng, which produces hydroxide in China, which is never going to have the same grid. So is one going to allow for a lead time in order to get a progression towards a clean and mining and energy sourcing of all of these raw materials? That that's fair. And it seems to be starting further downstream. Northolt is going almost is completely carbon neutral and so that cell, and then we can move up to cathode. I guess VASF is now going to give you effectively almost a carbon certificate on every product that they make, but it's going to take a little longer as we go upstream into the chemical processing and mining. You need to give some grace period.

Matthew Gordon: Rodney, thank you very much for your time today. Seriously, you're extremely knowledgeable on this subject. You say you did live and breathe it 7-days a week. When we spoke a few weeks ago, it was obvious to me that you love this space. And there's a lot going on. And the nuance is really, really important.  there's some real key learnings for people new to Lithium just coming up to the first time. And maybe even people who haven't really looked at Lithium the right way before. I appreciate your time today, and you're going to come back every couple of weeks and talk to us and tell us what's going on in the world. Because it looks like it is rapidly working it's a way for some meaning, for sure.

Rodney Hooper Excellent. Thanks very much for having me on, Matt.

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