AGY 0.00% 9.4¢ argosy minerals limited

On a macro level, the markets will pay attention to the...

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    On a macro level, the markets will pay attention to the presidential elections.... BUT

    This is where doing your research on the company, and the relevant sectors, is very important.

    Back at the AGM in May, JZ acknowledged that no one knows who will win the election, but that they were working to ensure they're covered on both angles. The lithium sector and supply chain is a multinational one. Companies such as Mitsubishi and the Korean conglomerate are international companies, who will be very used to navigating political and cultural changes and differences in many countries (eg we know that Mitsubishi have offices in both Chile and Argentina) and they've operated in foreign countries under different and changing administrations before... ie the elections are nothing new to international companies.... and the reality is that securing lithium supply outstrips concerns over a presidential election.

    The other reality that is worth remembering, is that the Federal Gov doesn't have jurisdiction over the province. It's the local provincial Salta Gov that owns the mineral rights and grants the approvals. For a long time now, AGY have maintained good relationships with the local gov, including advantageous relationships such as PA having a long working relationship with the Salta Mining Secretary (having worked with them previously at FMC). It's predominantly the local communities that benefit from AGY being granted the approvals, ie in addition to the royalties and taxes paid to the Salta gov, it's local people that are employed and local businesses that benefit - hence there is also an incentive for the Salta gov to build and nurture enterprises within their own provinces.

    So, the multinational companies want/need to secure supply... but I don't for a moment think they'll throw caution to the wind in doing so, but I also don't think the Presidential elections will scare them off.... rather, I think the trigger that will underpin cementing the relationship and sealing any deals is the local provincial Salta gov granting the 2,000 tpa approvals.

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