July 19, 2023

“We Need Our Economy To Be Victorious” Featuring James Calaway, Ioneer

Today we were delighted to host James Calaway in our office in Houston for a broad discussion on mining, solar energy, and the energy transition. James is a solar and lithium industry veteran with a unique background centered on his desire to help the world reduce emissions and as he describes, “save the planet from killing itself.” He is the former chairman of Orocobre, has considerable experience with Chilean solar projects, and is currently the Executive Chairman of Ioneer. Ioneer is advancing the Rhyolite Ridge Lithium-Boron project in Nevada, which is projected to help power upwards of 50 million electric vehicles. We were thrilled to visit with James.

In our conversation, James first walked us through his fascinating background that started with an interest in arms control and traversed co-founding Space Industries, entering the oil business, studying battery technology, investing in Orocobre, a lithium company in Argentina, which became Allkem after its successful growth and merger with Galaxy, retiring from Allkem after its successful growth, and becoming involved with Ioneer. We discuss the difficulty of building on Federal lands and the cost of construction in the US versus China, the future of battery technology, how to approach mining projects from an economic standpoint, and the potential for a future supply-demand issue for lithium around 2028. James shares his experience securing a loan for Ioneer through the US Loan Programs Office and the company’s experience with the community and government surrounding their project in Nevada. We also discus responsible mining globally, the opportunities and challenges with hydrogen, James’ experience with solar and hydrogen in Chile, and his desire to see the oil and gas industry lower emissions and fully participate in the energy transition. It was a fascinating and wide-ranging conversation and we greatly appreciate James for sharing his time and perspectives.

Mike Bradley kicked us off with an update on the markets, noting the major driver this week has been the exceptional earnings from banks and brokerages and that equity markets seem to be in a bit of a “Goldilocks” phase, where the DJIA, SP& 500 and Nasdaq are all approaching record levels last seen in December 2021, despite 2-year yields increasing by 400 basis points. He highlighted that a “soft landing” scenario is gaining consensus and that equities are experiencing a bit of a “fear of missing out.” Mike also reiterated that crude oil markets have repriced back to backwardation and that the recent move higher in crude price is more a reflection of improving demand sentiment. He wraps up by discussing recent news including last week’s Denbury and Exxon merger announcement, the irony of BlackRock naming Aramco’s CEO to its board, the beginning of oil service earnings season this week with several oil service leaders reporting, and flags that next week’s reporting will be heavy natural gas levered E&Ps. Jeff Tillery added to Mike’s earnings comments and mentioned the tendency to over-interpret pricing reductions during activity hiccups and differentiating between realized pricing and anecdotal pricing in Q2 results and Q3 guidance. He also highlighted the need for a more nuanced discussion around inventory degradation and that the bar for the oil service sector is set higher for the upcoming earnings season after performing well over the past three months.

We hope you enjoy the conversation with James as much as we did. Our best to you all!

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April 5, 2023

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