High Costs of Synthetic GraphiteTesla, to be successfull in reducing the costs of its finished product has to bring the price of all inputs to its cars down dramatically. At the same time it has to maintain the quality of its finished product. That means synthetic graphite or something of comparable purity/characteristics and quality.
Trouble is, for Tesla the price of battery grade sybthetic graphite is about $20k/ton.
Albany graphite has been proven up to be that comparable substitute for aynthetic. So conceivably ZEN could sell it to Tesla at a 25% discount or $15k and make huge profit margins, assuming a less than $1000 cost per ton to produce.
However if Tesla is really serious about bringing costs down then an outright purchase of the Albany deposit is obviously the way to go. For example if Tesla were to buyout ZEN which is what AE wants, for say $2B, then on a per ton basis Tesla would secure its synthetic quality graphite for about $1428/ton. That is about the price of flake graphite. Round the price up to $2k per ton and you have the ongoing mining costs covered going forward.
A $2b purchase of Albany equates to $33 a share for us LT ZEN holders. Works for me!
Muff