Pilbara Minerals Ord Shs T.PLS

RE:RE:RE:Juniors versus Seniors / Management / Value / suitors / AE

[aggman]

The devil (and God) is in the detail.

Firstly the degree of the problem differs to each suitor - depending on the suitor, and their position in the market (and across from CX in other geographies).

I'd argue it would be more problematic for US Concrete (who would be buying PLS for their own consumption) - as opposed to Vulcan - who as an aggregate owner - sell to downstream RMX across their 30 states - and probably to CX in FL,TX, AX, CA etc.

When you start elevating a deal to this level - where there is a broader pan-US trading relationship (or in the case of Heidelberg - maybe a global trading relationship) - then sorting it out becomes part in a multi-point negotiation about assets, swaps, threats, etc.  (In a word - at some level - it gets resolved and it is not an impediment).

Also, Supply Agreements can be terminated. Any contract can be terminated.  Marriages get terminated etc.  any and every contract can get terminated, re-negotiated.

in the interest of both sides - 30 year contracts should be re-negotiated at 5 year intervals (is this still working for us, Darling? change the game if someone has too much power because the landscape has changed).  It's called the hold-up effect.

This is good.  And not a deterant to a suitor.

I'd argue that in the last 4 years CEMEX have had too much leverage and sway over PLS - in contract discussions - and that is why PLS has not been getting appropriate price increases, or an increased size of the rent.  I think that is now starting to change - fo rthe better.

What we are seeing now, as the market returns, is more levergae comming back to PLS.

CEMEX are important, yes - but every entity should capture the rent they deserve - and now I feel some of that negotiating power is comming back to Polaris.  They are in good health.

Opening PoLB and having other customers will give PLS additional leverage over CX.