Pilbara Minerals Ord Shs T.PLS

RE:Polaris needs Cemex but can't make any money from them

[seatleslim]

That is a great point with which to challenge PLS Board and management. If that is correct, it would seem that PLS has not much future as an independent company.  I'm hoping (and beilieve) that the answer and reality is more nuanced.  More like, CX desperately needs PLS for high spec work and work in immediate proximity to their facilities in SFO and Redwood City, around which there is massive ready-mix infrastructure in place.  They may at some point deperately need the resource more generally if work picks up or if there is a supply issue at one or more of the local incumbent quarries.  If PLS can't show that the volume reductions were replaced with much higher margin in the form of price increases, then it doesn't make much sense to run a public company to move a bunch of sand around the seas with little compensation to the owners.

The interesting thing in that more pessimistic view is that there are several logical companies that ought to be eager to own this.  Vulcan, Hanson, Summit (which bought out a major Vancouver operation in one of its formative transactions) and of course CEMEX.  An outlier might be US concrete.  It has to be worth twice or more what its selling for to one of those.  But I honestly hope that is the default worst-case.  If anything, you would think CEMEX would be vunerable to a deep-pocketed owners, as I don't think there is any question about long-term supply issues in the Bay area.  Vulcan is a $15 billion company and could shut down Orca for two years without any material consequence if CEMEX wanted to horse around with its "supply agreement".  If I were CEMEX I would want PLS profitable enough to stay independent.  At the end of the day everybody in the Bay area market is going to recover any price increases anyway.

There are several other wild cards beyond the Olympics.  A seismic event and one or more of the BC LNG projects come to mine.