Keith Phillips: Yes, it’s a good question. Candidly, we at Piedmont don’t spend a lot of time directly thinking about the energy storage markets. It’s not where our focus has been. We’re focused on the EV business and the customers we have now and the customers we’re spending time with, the strategic parties are all aligned with, frankly, spodumene concentrate to lithium hydroxide for vehicles. So, having said that, ESS is a really important part of the overall lithium kind of macro story. It’s growing more quickly. It’s at an earlier stage, but it’s growing more quickly than EV demand for lithium, so it’s really helpful. I mean, to some extent, lithium units are fungible, and to the extent they’re committed into energy storage, grid storage solutions, that’s great for demand generally, and I think it will have an impact.
And I think the share of lithium going into the ESS business is growing, even though demand for each of the other components, like EVs, is also growing very quickly, but ESS is growing more quickly. So you’re right, it was an insignificant part of the market or a less significant part of the market three years ago when the market began to turn or four years ago now and it will certainly be a bigger part going forward.
Noel Parks: Great. Thanks. And I guess when you talk about sort of non-dilutive funding options, and you talked a little bit about timing and maybe this not being ideal, but I guess when you talk about potential partners, looking at sort of the medium term, I’m just wondering, is sort of the rate environment a significant piece of what potential funders might be thinking about or are they just more sort of big picture macro, assuming that we have sort of a near-term choppiness in pricing and then return to a more normalized pricing, for sure, like a subsequent leg of whatever financing you have. Any thoughts there?
Keith Phillips: Yes, I hope I answer the question that you were kind of where you’re getting at. I guess I would say, I mean the strategic parties we’re talking to tend to be very large companies in the automotive business, the battery business, other businesses, mining and oil and gas, they’re a variety of parties. These are big projects, so they tend to attract big companies with strong balance sheets for whom the financing environment that might affect a smaller company like ourselves is somewhat less significant. And these are companies often who have made very significant commitments of their own to capital projects for which they need supply. They’ve either building EV plants or they’re building battery plants or they’re building cathode plants.
And spending all the money to build those plants and being unable to secure supply is a serious issue for them. So there’s a real focus on it. So I don’t think it’s having quite a significant impact on those discussions. And really, we don’t have anybody on the strategic side telling us to slow down. They don’t need the material. It’s quite the opposite. People are wondering, why won’t you do a deal with me now? For us, the issue is a little more, A, we’re having the deliberation about Carolina versus Tennessee timing, just given the pace of permitting and everything else; and B, there’s the process of going through the ATVM loan process, which is a multi-month process obviously. And it’s really whether this is the time we think we want to kind of lock-in equity and debt commitments for a project that is large in a market that’s not as attractive as was a couple of years ago and not as attractive as we think it will be a couple of years from now.
So we’re just being patient. I mean, one of the threshold questions we think about every day, we’re all shareholders and we’re focused on building a business successfully. At the end of the day, we want to do it in a very prudent way while minimizing dilution to our shareholders. Full stop. So we’re not going to race into a $1 billion plus project where we give away a lot more value in a bear market than we might be able to preserve in a stronger market.
Noel Parks: Great. And just a last one from me. You talked about some of the encouraging drilling results up at NAL. So that sounds like it offers the potential for some upside to past expectations. I wondered if maybe a little bit of post mortem we’re so focused on current production and shipments, but last year, the ramp up to the restart of the plant and everything, I wondered if there in a positive way you could sort of post mortem on sort of how that period went relative to expectations. Anything else encouraging about the process that might be a good clue to what further development stages might look like?
Keith Phillips: Yes, I’ll take a crack at that. Listen, we’re 10 months into production at NAL. These are projects that generally take a year or two to ramp. I think we feel really good about the ramp. The only thing that we wish had happened differently is pricing. We started the process in a bullish market. Pricing kind of fell month over month over month, which just makes it more challenging. But I think the team on the ground is doing an exceptional job. It’s a great team. It’s some components of the team that was there years ago, but really a fresh new leadership team who’s done just a great job. And I would highlight North American Lithium, it’s a special asset. It’s been around for a while. It was started really in 2012, 2013, 2014, in retrospect way too early before the EV market had developed, so it had a couple of false starts.
But I think it’s an asset now that has scale, it has a big resource, it’s got big upside based in the drill results. It’s in production. It was built, and some of the final capital is going into it now. And you contrast that with greenfield projects where there’s a lot of capital to raise and all the ramp process we’re almost done with every other project has to go through. You think about greenfield spots and main projects or others, they just will by of necessity take time to ramp, some more than others. So I think we’re at the tail end of that, and I’m hopeful we’re at the tail end of that, coming into a period where operating costs will continue to improve. With these capital projects being done and the prices begin to recover, there’s an opportunity for very substantial profitability at that asset pretty soon, so we’re excited about that.
Noel Parks: Great. Thanks.
Keith Phillips: Thanks a lot, Noel.
Operator: As of right now, we don’t have any pending questions. I would now like to hand back over to the management for the final remarks.
Erin Sanders: Thank you all very much for joining us today and for your interest in Piedmont Lithium. As I noted at the top of the call, our earnings release and presentation, as well as a replay of this call, will be available at our website. So with that, we thank you and have a good day.
