Last year at LME Week (metals industry event of the year consisting of a large number of sub-events in London) lithium was not much on the spotlight. This year it was everywhere. Beside the same faces of lithium insiders, you could see the crowd casually interested in it. Made of investment bankers, journalists and traders who never traded lithium and are not going to in a near future. Yet all of these individuals on the comment that you are from lithium industry, tended to quickly nod their heads and acknowledge that – “it is hot”.
Even City of London Corporation, institution only casually interested in commodities decided to host a lithium event in the beautiful Guildhall. The idea, I guess was to use City of London Corporation’s network in a government agencies and finance and do something with lithium as a theme.
So, event was held under the slightly over-the-top name “Financing the Lithium Triangle”. On the panel, there were public sector representatives of Chile, Argentina and Bolivia. Bolivian YLB was the only company on the panel – still as close to public sector as it gets, considering that even their website is hosted under gob.bo domain.
It was a first commodity conference I have had a pleasure to attend in Europe which was almost exclusively in Spanish. It is not uncommon for government representatives from emerging economies to be allergic to English. Yet one would expect to stick to better or worse version of “Globish”, at a conference that tackles the global energy (r)evolution.
Nothing new has been said, during the presentations, one could say that only Chilean was attractive enough to keep people focused. I do not know whether it was due to the settings, gov officials on the panel or something else, but the event had a veneer of an academic event, not a place where you could connect or discuss much of the business. I also did not see much of the financiers in the room, to my disappointment. But maybe it’s just me, and I am not outgoing enough. I wonder why, there were no folks from big lithium producing companies on the panel, are they too busy to discuss financing needs? Or maybe there is enough money being flushed on them… that financing is not on the top of their agenda.
Nonetheless nobody questions that public sector plays a huge role in lithium world. If we look, even at recent and not so recent developments, we have: CORFO, a government agency effectively deciding how much lithium is produced in Chile, so it is not pure market forces and execs decisions that decide about supply level, we have Chilean court deciding that after all Tianqi can buy stakes in SQM (and whether a deal will go ahead or not, was a big “if” for some months, and met with interventions on Chinese embassy level, that could potentially impact trade and investment between Chile and China at a macro level for next years, if a deal had been blocked).
Last but not least yesterday Bloomberg published an interesting article, implying that China state linked companies, rescued this IPO from even a worse performance.
Hence in lithium, talking to “governments”, is maybe as good or better than talking to private companies, and City of London Corporation was on the spot with a selection of the panel.