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Sigma Lithium Signs 6-Year Offtake Agreement With LG Energy Solution To Supply Concentrate For EV Batteries

Sigma Lithium Corporation (TSXV: SGML) announced this morning that it has signed a binding term sheet with LG Energy Solution…

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This article was originally published by The Deep Dive

Sigma Lithium Corporation (TSXV: SGML) announced this morning that it has signed a binding term sheet with LG Energy Solution. The agreement entails the company to provide lithium concentrate for the latter’s manufacturing of lithium-ion batteries for electric vehicles.

The offtake agreement between the two parties stipulates a six-year engagement on a “take or pay” basis. LG Energy will be purchasing 60,000 metric tonnes of 6% battery-grade sustainable lithium concentrate from the company in 2023, and 100,000 metric tonnes annually from 2024 to 2027.

“This offtake is perfectly aligned with our strategy of creating direct commercial relationships with the largest Tier 1 battery producers (who are the final end-users in the lithium supply chain), providing stability to our future cash flows,” said Sigma Lithium co-CEO Ana Cabral-Gardner in a statement.

As per the agreement, the two companies also agreed to negotiate each year an additional optional supply starting with 15,000 metric tonnes annually for 2022 and 2023, and 50,000 metric tonnes from 2024 to 2027.

The purchase price for the lithium concentrate will be floating and will be linked to the market prices for high purity lithium hydroxide.

Sigma Lithium last traded at $10.56 on the TSX Venture.


Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Sigma Lithium Signs Six-Year Offtake Agreement With LG Energy Solution To Supply Concentrate For Electric Vehicle Batteries appeared first on the deep dive.

Energy & Critical Metals

Green hydrogen – the missing piece in Australia’s decarbonisation puzzle

Special Report: The recent IPCC report reminds us that action is needed to help Australia, and the rest of the … Read More
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The recent Intergovernmental Panel of Climate Change (IPCC) report reminds us that action is needed to help Australia, and the rest of the world, pick up the pace in reaching net-zero emissions.

Regardless of where you stand politically, the report – like many before it – tells us the world is getting hotter. And unequivocally, atmospheric carbon dioxide (CO2) concentrations are higher and rising faster than ever before.

With insights going back thousands of years, and the ability to send man to the moon, NASA is a reliable source of data into this matter. The graph below is extracted from the NASA website and shows the stark realities of atmospheric carbon dioxide.

And this is usually where the problem starts. More often than not, conversations about climate are fuelled by rage and regret. We do not focus on the facts or pragmatic and realistic options.

For example, how do we reach net-zero emissions whilst still providing 24/7 reliable power. Does driving an electric car fuelled by fossil fuel generated power really reduce CO2? How can we transition away from fossil fuels and maintain our standard of living? How can we reliably store renewable energy to ensure our grid stability?

 

Letting go of CO2 emissions

Currently, energy generation belches out a third of Australia’s CO2 emissions. With entire countries committing to net-zero emissions, surely, we can start with our grid?

Quite simply, without a net-zero energy infrastructure, a net-zero economy cannot exist.

But this won’t happen overnight.

We need an approach to bring together multiple renewable technologies to create a reliable renewable energy supply chain. One that won’t buckle and strain in peak hours or seasons.

A robust net-zero energy infrastructure is key to delivering lower greenhouse gas emissions without compromising on reliability.

 

Fuelling the transition

Green hydrogen has the potential to address decarbonisation and rising temperatures. It is clean, reliable, and can generate heat and power for everyday commercial, transport, and residential use.

What’s more, the National Hydrogen Strategy states 1kg of clean hydrogen avoids 15kg CO2 emissions.

As a result, it’s thought that hydrogen could supply up to 25% of the world’s energy needs by 2050.

At the same time, it will enable the storage of valuable solar and wind power for it to be distributed at times of peak consumption.

 

Safeguarding our planet, our economy, and our future

 The IPCC report is a call to action. But what it tells us is, we still have options.

What we know for sure is, the foundation of a net-zero economy is a net-zero infrastructure. Fossil fuels will be phased out and replaced with sustainable, renewable alternatives.

The place to start is looking at the systems that can be improved now. For example, as we phase out fossil fuels, we should look for integrated energy solutions. These are projects that combine key elements of green energy production and storage such as renewable baseload energy and hydrogen production.

Such projects will allow us to address our energy needs, while moving closer to the renewables that will support net-zero emissions.

More than 70 countries (representing over half the world’s GDP) are already on this path with net-zero carbon ambitions. Approximately half of these have hydrogen-specific strategies as a beacon for future decarbonisation and energy security.

To make this move successful however, we need dedicated, governmental focus on bringing green hydrogen to scale.

Verdant Earth Technologies firmly believes that renewable hydrogen will change the world, unlocking the net-zero future desperately needed to protect humanity’s collective future.

This article was developed in collaboration with Verdant Earth Technologies, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Green hydrogen – the missing piece in Australia’s decarbonisation puzzle appeared first on Stockhead.

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Energy & Critical Metals

Is There Any Market Power in Online Display Advertising?

A lawsuit filed by the State of Texas and nine other states in December 2020 alleges, among other things, that Google has engaged in anticompetitive conduct…

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A lawsuit filed by the State of Texas and nine other states in December 2020 alleges, among other things, that Google has engaged in anticompetitive conduct related to its online display-advertising business.

Broadly, the Texas complaint (previously discussed in this TOTM symposium) alleges that Google possesses market power in ad-buying tools and in search, illustrated in the figure below.

The complaint also alleges anticompetitive conduct by Google with respect to YouTube in a separate “inline video-advertising market.” According to the complaint, this market power is leveraged to force transactions through Google’s exchange, AdX, and its network, Google Display Network. The leverage is further exercised by forcing publishers to license Google’s ad server, Google Ad Manager.

Although the Texas complaint raises many specific allegations, the key ones constitute four broad claims: 

  1. Google forces publishers to license Google’s ad server and trade in Google’s ad exchange;
  2. Google uses its control over publishers’ inventory to block exchange competition;
  3. Google has disadvantaged technology known as “header bidding” in order to prevent publishers from accessing its competitors; and
  4. Google prevents rival ad-placement services from competing by not allowing them to buy YouTube ad space.

Alleged harms

The Texas complaint alleges Google’s conduct has caused harm to competing networks, exchanges, and ad servers. The complaint also claims that the plaintiff states’ economies have been harmed “by depriving the Plaintiff States and the persons within each Plaintiff State of the benefits of competition.”

In a nod to the widely accepted Consumer Welfare Standard, the Texas complaint alleges harm to three categories of consumers:

  1. Advertisers who pay for their ads to be displayed, but should be paying less;
  2. Publishers who are paid to provide space on their sites to display ads, but should be paid more; and
  3. Users who visit the sites, view the ads, and purchase or use the advertisers’ and publishers’ products and services.

The complaint claims users are harmed by above-competitive prices paid by advertisers, in that these higher costs are passed on in the form of higher prices and lower quality for the products and services they purchase from those advertisers. The complaint simultaneously claims that users are harmed by the below-market prices received by publishers in the form of “less content (lower output of content), lower-quality content, less innovation in content delivery, more paywalls, and higher subscription fees.”

Without saying so explicitly, the complaint insinuates that if intermediaries (e.g., Google and competing services) charged lower fees for their services, advertisers would pay less, publishers would be paid more, and consumers would be better off in the form of lower prices and better products from advertisers, as well as improved content and lower fees on publishers’ sites.

Effective competition is not an antitrust offense

A flawed premise underlies much of the Texas complaint. It asserts that conduct by a dominant incumbent firm that makes competition more difficult for competitors is inherently anticompetitive, even if that conduct confers benefits on users.

This amounts to a claim that Google is acting anti-competitively by innovating and developing products and services to benefit one or more display-advertising constituents (e.g., advertisers, publishers, or consumers) or by doing things that benefit the advertising ecosystem more generally. These include creating new and innovative products, lowering prices, reducing costs through vertical integration, or enhancing interoperability.

The argument, which is made explicitly elsewhere, is that Google must show that it has engineered and implemented its products to minimize obstacles its rivals face, and that any efficiencies created by its products must be shown to outweigh the costs imposed by those improvements on the company’s competitors.

Similarly, claims that Google has acted in an anticompetitive fashion rest on the unsupportable notion that the company acts unfairly when it designs products to benefit itself without considering how those designs would affect competitors. Google could, it is argued, choose alternate arrangements and practices that would possibly confer greater revenue on publishers or lower prices on advertisers without imposing burdens on competitors.

For example, a report published by the Omidyar Network sketching a “roadmap” for a case against Google claims that, if Google’s practices could possibly be reimagined to achieve the same benefits in ways that foster competition from rivals, then the practices should be condemned as anticompetitive:

It is clear even to us as lay people that there are less anticompetitive ways of delivering effective digital advertising—and thereby preserving the substantial benefits from this technology—than those employed by Google.

– Fiona M. Scott Morton & David C. Dinielli, “Roadmap for a Digital Advertising Monopolization Case Against Google”

But that’s not how the law—or the economics—works. This approach converts beneficial aspects of Google’s ad-tech business into anticompetitive defects, essentially arguing that successful competition and innovation create barriers to entry that merit correction through antitrust enforcement.

This approach turns U.S. antitrust law (and basic economics) on its head. As some of the most well-known words of U.S. antitrust jurisprudence have it:

A single producer may be the survivor out of a group of active competitors, merely by virtue of his superior skill, foresight and industry. In such cases a strong argument can be made that, although, the result may expose the public to the evils of monopoly, the Act does not mean to condemn the resultant of those very forces which it is its prime object to foster: finis opus coronat. The successful competitor, having been urged to compete, must not be turned upon when he wins.

– United States v. Aluminum Co. of America, 148 F.2d 416 (2d Cir. 1945)

U.S. antitrust law is intended to foster innovation that creates benefits for consumers, including innovation by incumbents. The law does not proscribe efficiency-enhancing unilateral conduct on the grounds that it might also inconvenience competitors, or that there is some other arrangement that could be “even more” competitive. Under U.S. antitrust law, firms are “under no duty to help [competitors] survive or expand.”  

To be sure, the allegations against Google are couched in terms of anticompetitive effect, rather than being described merely as commercial disagreements over the distribution of profits. But these effects are simply inferred, based on assumptions that Google’s vertically integrated business model entails an inherent ability and incentive to harm rivals.

The Texas complaint claims Google can surreptitiously derive benefits from display advertisers by leveraging its search-advertising capabilities, or by “withholding YouTube inventory,” rather than altruistically opening Google Search and YouTube up to rival ad networks. The complaint alleges Google uses its access to advertiser, publisher, and user data to improve its products without sharing this data with competitors.

All these charges may be true, but they do not describe inherently anticompetitive conduct. Under U.S. law, companies are not obliged to deal with rivals and certainly are not obliged to do so on those rivals’ preferred terms

As long ago as 1919, the U.S. Supreme Court held that:

In the absence of any purpose to create or maintain a monopoly, the [Sherman Act] does not restrict the long recognized right of [a] trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal.

– United States v. Colgate & Co.

U.S. antitrust law does not condemn conduct on the basis that an enforcer (or a court) is able to identify or hypothesize alternative conduct that might plausibly provide similar benefits at lower cost. In alleging that there are ostensibly “better” ways that Google could have pursued its product design, pricing, and terms of dealing, both the Texas complaint and Omidyar “roadmap” assert that, had the firm only selected a different path, an alternative could have produced even more benefits or an even more competitive structure.

The purported cure of tinkering with benefit-producing unilateral conduct by applying an “even more competition” benchmark is worse than the supposed disease. The adjudicator is likely to misapply such a benchmark, deterring the very conduct the law seeks to promote.

For example, Texas complaint alleges: “Google’s ad server passed inside information to Google’s exchange and permitted Google’s exchange to purchase valuable impressions at artificially depressed prices.” The Omidyar Network’s “roadmap” claims that “after purchasing DoubleClick, which became its publisher ad server, Google apparently lowered its prices to publishers by a factor of ten, at least according to one publisher’s account related to the CMA. Low prices for this service can force rivals to depart, thereby directly reducing competition.”

In contrast, as current U.S. Supreme Court Associate Justice Stephen Breyer once explained, in the context of above-cost low pricing, “the consequence of a mistake here is not simply to force a firm to forego legitimate business activity it wishes to pursue; rather, it is to penalize a procompetitive price cut, perhaps the most desirable activity (from an antitrust perspective) that can take place in a concentrated industry where prices typically exceed costs.”  That commentators or enforcers may be able to imagine alternative or theoretically more desirable conduct is beside the point.

It has been reported that the U.S. Justice Department (DOJ) may join the Texas suit or bring its own similar action against Google in the coming months. If it does, it should learn from the many misconceptions and errors in the Texas complaint that leave it on dubious legal and economic grounds.

The post Is There Any Market Power in Online Display Advertising? appeared first on Truth on the Market.

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Energy & Critical Metals

Titan Project’s maiden resource establishes Tennessee as untapped critical mineral province

Hyperion Metals has released the maiden resource estimate (MRE) for its Titan Project which it says establishes it as the … Read More
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Hyperion Metals has released the maiden resource estimate (MRE) for its Titan Project which it says establishes it as the largest titanium, zircon, and rare earths minerals project in the USA – and confirms Tennessee as a new major critical mineral province.

The Titan project has a total mineral resource of 431 million tonnes at 2.2% total heavy minerals (THM) containing 9.5 million tonnes THM at 0.4% cut-off, with 241 million tonnes (56%) classified in the indicated resource category.

This includes a high-grade core of 195 million tonnes at 3.7% THM, containing 7.1 million tonnes THM at a 2% cut-off.

The THM consists of 12% zircon, 10% rutile, 40% ilmenite and 2% rare earth elements (REE) concentrate, and the mineralisation occurs in a single, large, near-surface deposit.

Hyperion Metals (ASX:HYM) says the combination of the grade, the high value THM assemblage as well as the low-cost jurisdiction and existing infrastructure highlights the potential to build a low-to-zero carbon, world-class critical mineral business in the US.

A key player in the domestic supply chain

The US is one of the largest global consumers of finished products containing these metals but is currently 100% reliant on imports – which is the driving force behind securing domestic supply chains for industry.

And the company is confident it could play a key role in securing these supply chains.

“Hyperion’s mission is to sustainably re-shore the production of American critical minerals and metals, and this maiden MRE is a crucial step towards this goal,” Hyperion CEO and managing director Anastasios Arima said.

“The maiden MRE has immediately established the Titan Project as a major, untapped potential source of critical minerals rich in titanium, zircon and heavy and light rare earths.

“The combination of scale and grade of these high value, critical minerals – in a low risk, low cost and low tax jurisdiction – has the potential to drive significant value creation.

“Together with our breakthrough titanium technologies and the strong partnerships we are building with industry, we believe we can deliver a sustainable US critical supply chain that will create long term value for the communities of west Tennessee, future offtake partners and our shareholders.”

Low carbon play in low-cost jurisdiction

The company reckons the Titan project is amenable to low cost and low impact minerals and extraction techniques such as dozer push followed by an industry standard mineral processing flowsheet.

The project also has a major logistical advantage with 150,000km of highway putting Tennessee within a day’s drive of most US consumer markets. The Titan project is also amongst the third largest rail centre in the US and has four commercial airports and 1600km of navigable waterways adjacent to it.

This means it would have a lower carbon intensity supply chain which would also result in lower costs for consumers, including the world’s largest pigment plant, which consumes titanium minerals as a feedstock, and is located around 20 miles away by road.

And the region is a low-cost jurisdiction for renewable power (US$0.06/kWh), biodiesel (US$0.94/l) and labour (US$50k per annum) which are major input costs in typical mineral sands operations.

Titan Project MRE drill holes and outline, plus drill holes pending for potential inclusion in an MRE update.

The maiden resource has room to grow

The MRE is based on 107 drill holes totalling 4,101m – but there’s potential to grow with another 109 drill holes for 3,566m which are in the final stages of analysis and will be incorporated into an upgraded MRE.

Hyperion also expects that accelerated land consolidation will create a platform for ongoing growth of the MRE.

 


 

 

This article was developed in collaboration with Hyperion Metals, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

 

The post Titan Project’s maiden resource establishes Tennessee as untapped critical mineral province appeared first on Stockhead.

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