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Let's see, Veteran (Vietnam era), Commercial Artist, picture framer, industrial engineer & corporate executive (once upon a time), small business owner and operator, Ayn Rand fan, Libertarian (and no, its not a synonym for "Republican" or "Conservative"), and history... More
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  • REE / Strategic Minerals Concentrator, June 5, 2013 333 comments
    Jun 5, 2013 11:46 AM

    All the REE/Strat news that's fit to fit...

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  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » GWM news:

     

    "Great Western Minerals Announces Letter of Intent with Star Uranium for Option and Joint Venture on Hoidas Lake Project
    4:05 PM ET, 06/04/2013 - PR Newswire

     

    SASKATOON, SK, June 4, 2013 /PRNewswire/ - Great Western Minerals Group Ltd. ("GWMG" or the "Company") (TSX.V: GWG / OTCQX: GWMGF), a leader in the manufacture and supply of rare earth-based alloys and high purity metals with a low cost, high-grade critical rare earth asset (the "Steenkampskraal Project" or "SKK"), announced today a letter of intent ("LOI") with Star Uranium Corp.(TSX.V: SUV) to enter into an option and joint venture agreement in respect of the Hoidas Lake Project, an area comprised of fourteen mineral claims totaling approximately 12,522 hectares and related property in northern Saskatchewan.

     

    "We have been actively evaluating the long term plans for our non-core assets and this agreement is consistent with our objective to focus our resources on the advancement of our Steenkampskraal Project," stated GWMG President and CEO Marc LeVier. "We believe Star Uranium is better positioned to complete the exploration of the property at this time." "

     

    Non-surprise for me. They are cleaning out the JE closet...
    5 Jun 2013, 11:49 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    TB: Does this concentrator use the same technology as Lynas's?

     

    :-))

     

    Well, awaiting news, might as well go for weak humor, and this one qualifies as weak..

     

    HardToLove
    5 Jun 2013, 11:57 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » The News horizon for Lynas is, I think, about 3 weeks out and approaching fast. NC might have made a few abrupt interviews by now, with hints, but I'm thinking we see a new approach with the new CEO. His corporate background was far more likely to present reality-based results in a methodical, dignified manner... So I expect to see more focus placed upon the formal reporting cycle.
    5 Jun 2013, 01:10 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5806) | Send Message
     
    Thanks Trip... I agree. I started accumulating this morning (June 6).
    6 Jun 2013, 10:14 AM Reply Like
  • jimp
    , contributor
    Comments (671) | Send Message
     
    News From Quest. Private placement dollars.

     

    http://yhoo.it/13FZTdh
    5 Jun 2013, 03:16 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Yes. Note the amazing tax treatment for native Canadians, particularly in Quebec. This makes sense for them, but probably not for Americans. In fact, without the favorable tax treatment, the overall impact for non-Canadians, or perhaps just non-Quebecois is pure dilution and the sums raised are not impressive (though they will give Quest a little money to live on for a while longer).
    5 Jun 2013, 03:24 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Why Markets Have Been Rallying While Commodities Have Been Tanking

     

    Read more: http://read.bi/110Wm7i
    6 Jun 2013, 06:39 AM Reply Like
  • Valley Boy
    , contributor
    Comments (2192) | Send Message
     
    Maybe it's close to the time to accumulate some scarce commodities while they are cheap.
    http://seekingalpha.co...
    6 Jun 2013, 01:25 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Maybe so. This just out on MineWeb:

     

    Overdue rotation into mining stocks may be on the horizon - Ecclestone:

     

    http://bit.ly/ZTha5o
    6 Jun 2013, 05:30 PM Reply Like
  • jimp
    , contributor
    Comments (671) | Send Message
     
    Thanks for these articles. I've certainly questioned my logic in investing (heavily) in the rare earth sector these last two years, while watching everything plummet. I continue to accumulate shares as the knife keeps falling. Hopefully, I'm not wrong that this sector will have future potential. Picked up some more shares of TAS & LYSCF today.
    6 Jun 2013, 07:24 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    You're not alone, and you're logic sound. I think we're going to see good returns... It's just going to take a while. My guess... Q2 2015.
    7 Jun 2013, 08:46 AM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5806) | Send Message
     
    Lynas just posted an operations update...

     

    Lynas is pleased to announce that the cracking and leaching unit of the LAMP has achieved 100% of its 11,000 tpa Phase I nameplate production capacity.

     

    Because the Rare Earths market remains subdued Lynas has implemented a program to reduce operating costs and expenditures
    6 Jun 2013, 10:33 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Good news, and nicely timed IMO. And it dodges the "teething problems" issue which would not have surprised me at all.

     

    Achieving Phase 1 is a major milestone for those components of the LAMP, but I wonder how this will stack up as far as producing the pure cerium, lanthanum and didymium final products for Customer Qualification... That's the news I want to see by June 30, that they have met customer expectations and are shipping commercial quantities for pay.

     

    And a tolling agreement for their remaining mixed oxide byproducts would be a boost.

     

    I have been hoping they would curtail further development plans that might be costly until the prices improve, and focus on finishing Phase 2 on budget (another upcoming announcement which would remove some doubters who see Lynas needing to supplement the budgeted restricted funds set aside to complete Phase 2).

     

    Those who bought at the recent lows (yesterday) could well benefit from this news.
    7 Jun 2013, 07:07 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    http://bit.ly/12w0h2p

     

    A two-page PDF with a nice little chart.

     

    And so down $0.01 last evening on the ASX? Did the RBA do something? AUD/USD took a big drop $0.9560 to $0.9492 this A.M 05:30 time frame.

     

    HardToLove
    7 Jun 2013, 08:09 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    TB: with "Phase 2 expansion of the concentration plant at Mount Weld is completed" and "The construction and pre-commissioning of Phase 2 of the LAMP is near completion. The Phase 2 kilns at the LAMP are currently in the process of being heated up for commissioning", is there a lot of expense left to complete the Phase 2?

     

    HardToLove
    7 Jun 2013, 08:25 AM Reply Like
  • ungawah
    , contributor
    Comments (896) | Send Message
     
    That's US$0.49 for us Up Top.

     

    Interesting that LYC hit a high of AU$0.0547 an hour after the announcement. It fell toward the close, but the initial reaction was positive.
    7 Jun 2013, 09:02 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » HTL: Indeed, that update would indicate that Phase 2 is about done, but what we aren't sure of just yet is whether it required additional funds beyond those set aside for that purpose. Bringing in the project on budget would be a plus of course.

     

    The whipsaw share price reaction appears to me to be something which can be linked back to the very large short positions which will either have to be unwound (hence in need of a certain share price for the large entities borrowing the shares and making the bets to extract their planned profits) OR which might represent inside knowledge of a negative type unknown to us (all the Lynas news has of course been quite positive of late).
    7 Jun 2013, 10:02 AM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5806) | Send Message
     
    Very buggy morning on SA. If you refresh your browser they show up again.. on my browser you refresh with a command R.

     

    The new comment flags are also not working correctly. A new comment flag comes up, you click on the comment, and nothing new is there... same bug, different manifestation. The like count is also not working. Right now, I see blanks, but when I sign off and sign back on the like counts correct.
    7 Jun 2013, 10:15 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Something very odd just occurred with SA. A number of comments just vanished. Rest assured that I did not "vanish" them. Those who lost comments, please repost if you can.

     

    (I hate it when the gremlins get loose...)
    7 Jun 2013, 10:03 AM Reply Like
  • ungawah
    , contributor
    Comments (896) | Send Message
     
    Noticed that, but the messages did com back.
    7 Jun 2013, 10:13 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    I'm aware that SA is working on adding new features that include a mobile app (I'm a beta tester) along with better policing of article writers. It's possible that comments are lost while SA continues to tinker with their backend.

     

    I've also heard that several well known writers have also been kicked out for blatant pumps and other bogus behavior. I was listening to a podcast the other day (Motley Fool) that talked about this issue. Apparently some article writers (on SA and Motley Fool) that are being approached by companies to write positive articles about their companies in order to pump their stock---and, their getting big $$$ to do it. Most people are honest and say no, but their are folks out their trading on their reputations and pumping junk for a quick payoff. As always—reader beware.
    7 Jun 2013, 12:24 PM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    Croney bloggers?
    7 Jun 2013, 03:10 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Correct, DG. Sigh...

     

    SA is SOOO old fashioned. It really needs to get in step with the new crony capitalist/socialist world order.

     

    Everyone does it, y'know.
    7 Jun 2013, 03:12 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5806) | Send Message
     
    My message did not come back...
    7 Jun 2013, 04:25 PM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    At least you did Rattie so we have that to be thankful for. You were not disappeared.
    7 Jun 2013, 04:29 PM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    I got a message on my phone that a comment had been deleted. I have no idea if it was here.
    10 Jun 2013, 11:19 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » I'm missing several...

     

    Who knows what I said? Short term memory is shot.
    7 Jun 2013, 05:48 PM Reply Like
  • optionsgirl
    , contributor
    Comments (5045) | Send Message
     
    Here's a new Chinese crackdown per Mineweb. It includes some interesting statistics. According to the report quoted, China supplied 85% of the rees last year. That's a 13% decrease in just a few years.
    http://bit.ly/13so7IV
    8 Jun 2013, 10:57 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » I have seen various numbers about current Chinese REE dominance. For most of the elements it's near 100%. For the more common elements now shipping from companies like MCP, Lynas, and various operations in India and elsewhere, it probably is about 80-85% of world demand... Though I am also remembering that the "official" Chinese shipments over the past year were found to be "overloaded" with about 20% greater amounts shipped than officially on the manifest (an old, traditional smuggling method, of course).

     

    Add 20% to 80%...

     

    Then there are the large quantities which are known to have been smuggled out but are totally undocumented, and the question is very much unanswerable with any specificity.

     

    Now both Lynas and MCP have scaled back their short term production goals in response to a soft market (which ties back to rampant smuggling earlier, of course).
    8 Jun 2013, 11:03 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    "The newspaper reported that the meeting also discussed raising taxes on rare earths mined in China." and "Japan consumes two-thirds of China’s rare earth exports."

     

    Hm, aimed at the Japanese or a general blast to get ... what? Taxing the mining wouldn't give advantage to manufacturers moving there more than they already have. Raising FOB official China prices (as taxing the mining would seem to do) would seem to support ex-China miners and producers raising prices too, making them stronger competitors as their costs were more fully covered and higher margins were realized?

     

    HardToLove
    8 Jun 2013, 11:28 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » I have gone on record repeatedly that I believe we would soon see an end to China's strategic policy to entice Western (particularly Japanese and American) high tech industry to China, for the simple reason that the strategy has already succeeded, and its time for them to move on to their next geopolitical strategy.

     

    One builds a Cartel (such as that they have assembled to run the REE sector) for a reason, and I believe we will now see what they will do with theirs. Raising taxes on state-owned and operated mega companies (which comprise the vast majority of the core holdings for the new REE Cartel) is just a conduit for raising the costs on materials they currently hold a near-monopoly (ie, Cartelization 101) over. This will put pressure on the consumers of their products rather than the sources for their raw materials. Years ago China tried mightily to purchase Lynas, finally failing due to intervention by the Australian government. If they now pursue a policy of cutting off exports of raw materials, and switching to imports (as they simultaneously reach out and seize the value-added manufacturing markets that lie down stream of the REE family of strategic minerals), prices for those materials could, logically, be anticipated to rise.

     

    What they intend is probably bad news for the remaining high tech operations in the West, who must now start to see direct competition with China entering their most lucrative remaining product lines built from REE materials. This should benefit Western sources for raw materials, of course...

     

    This has been my REE thesis throughout the price meltdown.
    8 Jun 2013, 11:54 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    Thanks TB. I hadn't though of them having already lured all the industry in they wanted and now being ready for the next plan.

     

    HardToLove
    8 Jun 2013, 12:02 PM Reply Like
  • LT
    , contributor
    Comments (4605) | Send Message
     
    TB, I don't think anyone has a better thesis on REE's & China than you. Thanks for sharing with us and i totally agree. Just thinking about taking a stake in Lynas this week coming up.

     

    Is it too early to buy Molycorp ?
    8 Jun 2013, 12:11 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » I would trust the Lynas story now more than MCP, which still has some 'splaining to do.

     

    Now that Lynas has admitted to curtailing plans for "whole hog" production (presumably meaning they may be ABLE to produce at name plate Phase 1 11kmt per year rates, but are choosing not to because the market is soft), and MCP earlier did the same, while China has just sent a clear message that FOB prices are going up while export quotas are going away...

     

    Its an interesting set of metrics, to be sure.

     

    MCP is riskier than Lynas at this point, for a lot of reasons.
    8 Jun 2013, 12:16 PM Reply Like
  • optionsgirl
    , contributor
    Comments (5045) | Send Message
     
    Here is a bit of tantalizing info from the IHS report, including an abstract and table of contents. For the full report, it'll set you back a cool $5K.
    http://bit.ly/11zgjW3
    8 Jun 2013, 12:25 PM Reply Like
  • Valley Boy
    , contributor
    Comments (2192) | Send Message
     
    Japan keeps working on a plan to secure a rare earths supply from India, bypassing China.
    http://bit.ly/17xAEyZ
    http://bit.ly/14JlTmk
    8 Jun 2013, 01:45 PM Reply Like
  • Valley Boy
    , contributor
    Comments (2192) | Send Message
     
    Japan's efforts to procure a rare earths supply from Kazakhstan is well underway, also.
    http://bit.ly/13sPToG
    8 Jun 2013, 02:37 PM Reply Like
  • Valley Boy
    , contributor
    Comments (2192) | Send Message
     
    Maybe Japan can import rare earths from Malawi sometime in the future, too. Malawi has a great stash of rare earths. Malawi is finally getting connected to the Mozambique coast with a couple of reconstructed railroads which should help its exporting capability a great deal.
    http://preview.tinyurl...
    http://bit.ly/18gkI5j
    http://bit.ly/11nUxAj
    8 Jun 2013, 03:25 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Lynas still has a claim in Malawi, tough place to operate...

     

    Japan's problem longer term will not be getting rare earth raw materials, but keeping their REE-based finished goods markets in the face of Chinese competition.
    8 Jun 2013, 05:36 PM Reply Like
  • Valley Boy
    , contributor
    Comments (2192) | Send Message
     
    It looks like Japan is working on a strategy to shift part of its industrial capacity to Vietnam in a move to counter China's competition. This looks like it will probably be done through joint ventures and subsidiaries.
    http://preview.tinyurl...
    http://bit.ly/117KwrY
    http://bit.ly/18hkHhw
    That strategy might prove to be attractive for them since Vietnam has lower business operating costs and also has some rare earth mines.
    http://bit.ly/117Kxw5
    http://preview.tinyurl...
    It might be too early to tell for sure. I'll bet that Japan has studied the Malaysian situation with Lynas to help figure out what to do in Vietnam.
    8 Jun 2013, 09:42 PM Reply Like
  • ungawah
    , contributor
    Comments (896) | Send Message
     
    "That strategy might prove to be attractive for them since Vietnam has lower business operating costs and also has some rare earth mines."

     

    But isn't this where Lynas really shines? There are lots of mines and would-be mines, but doesn't Lynas have the most world's modern REE processing plant? Would Lynas do contract processing to fill any excess capacity at its LAMP?
    9 Jun 2013, 08:48 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » The LAMP might well toll some other mine's output, particularly if the mine is looking for Cerium and Lanthanum, or mixed metal dydimium output. Otherwise it would be more efficient to toll the goods to a facility that can separate high purity, individual elemental metals for the rest of the REE family. There is some talk that the shuttered Rhodia plants in Europe will be re-opened and updated to perform this task, and this may yet happen, but right now it looks like the plant being restarted is tasked to be the testbed for some REE recycling concepts.
    9 Jun 2013, 09:44 AM Reply Like
  • Valley Boy
    , contributor
    Comments (2192) | Send Message
     
    It seems like Japan is looking all over the place for rare earths. The Japanese may not give Lynas their full attention, after all.
    http://bit.ly/11cbCln
    http://bit.ly/12Jhohh
    13 Jun 2013, 01:44 PM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    VB those links are a bit dated. They may not be scrambling as much today. Lynas may still get a lot of attention. (said with fingers crossed)
    14 Jun 2013, 06:16 AM Reply Like
  • Valley Boy
    , contributor
    Comments (2192) | Send Message
     
    I'm glad to have found a more recent followup story, OG. It sounds like they are maintaining their active interest with Lynas while slowly developing a similar interest in Vietnam.
    http://bit.ly/13GQQd6
    http://bit.ly/13GQQd8
    14 Jun 2013, 12:58 PM Reply Like
  • optionsgirl
    , contributor
    Comments (5045) | Send Message
     
    The second link on VB's first comment lists that India
    "produces/sells six heavy minerals namely ilmenite, rutile, zircon, monazite, sillimanite and garnet as well as various value added products."
    I know that zircon is used in the manufacture of some ceramics and garnet sand is an abrasive, but these aren't actually considered "ree's", right? Are heavy minerals rees?
    Is the comparison of India's products with China's "apples n oranges?"
    8 Jun 2013, 02:33 PM Reply Like
  • Valley Boy
    , contributor
    Comments (2192) | Send Message
     
    Here's a list of their rare earths at the bottom of this webpage, OG. I'm not sure why they wouldn't list them at the top of their list since their importance probably should be emphasized.
    http://bit.ly/18Wa00M
    8 Jun 2013, 02:46 PM Reply Like
  • optionsgirl
    , contributor
    Comments (5045) | Send Message
     
    Thanks, VB. It's a comprehensive website and will take some time for me to read.
    8 Jun 2013, 03:58 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » They are listing minerals which contain REEs in their makeup. Monazite, for instance, is the source for REEs at GWM's SKK project.
    8 Jun 2013, 05:41 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Meant to mention this earlier....

     

    Star Uranium (see first entry on this blog page regarding GWM and Hoida project) BOD includes a certain Mr. Engdahl....

     

    This was predicted in an earlier REE concentrator, of course.
    11 Jun 2013, 03:06 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Interesting read: (Bullish on Tin and Palladium)

     

    Lisa Morrison On The Outlook For Industrial Metals:

     

    http://seekingalpha.co...
    12 Jun 2013, 11:58 AM Reply Like
  • jimp
    , contributor
    Comments (671) | Send Message
     
    "Lynas announces minimum rare earth price schedule." This doesn't sound bullish...

     

    http://bit.ly/11Acv3r
    12 Jun 2013, 07:29 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Its a shot across the bow for low FOB China prices. This indicates that Lynas will be seeking higher prices than what might be set in China, with the inference that environmental standards are involved.

     

    This is of course logical, but now we have to see if their customers will still want to exercise their sales agreements and pay more than they might get (that particular day) if they ordered from China.

     

    China has been seeking to have this discussion (both directions) work for them. As the engineers of the near-monopoly they built, they now seek to pretend it was the customer's fault that prices were low and work standards ignored. In their view, they were the victims then, and afterward as well. And since they are reportedly fixing those problems, and of course converting their less formal national monopoly into a very formal cartel structure, they want to be viewed as the victims again in any future contretemps with the West over export quotas, supply disruptions, or predatory trade practices.

     

    Now we see whether "reliable supply" really means anything. Oddly I suspect it might be acceptable to the larger Japanese firms, and a few companies elsewhere in the West, but not all or even most. As for governments...

     

    I would expect the Japanese and Korean governments to work with the new Western sources, but I am doubtful of the rest, particularly the American and EU governments. They will just roll over and go back to sleep.

     

    This adds another wrinkle to the geopolitical maneuvering, plunking the problem right back in the laps of the world's governments...

     

    And its not a pretty prospect.
    12 Jun 2013, 10:21 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Lynas dropping strongly on the ASX right now. This news is (correctly, I believe) viewed as recognizing a weak position for the company, and is very troubling when viewed against prior proclamations of sales contracts set to begin shipping. This throws their entire business plan into doubt, unless...

     

    Right now the Sydney market seems to believe they will fail, and frankly the constant downdraft from powerful players shorting the stock since the Malay elections leads me to believe this was a foreseen event.

     

    Well, its obvious they are seeking to negotiate or renegotiate the way prices are reached with someone, either their own customers or the Chinese.
    13 Jun 2013, 12:08 AM Reply Like
  • LT
    , contributor
    Comments (4605) | Send Message
     
    TB, Lynas bucking the Chinese is like US investors saying "don't bet against the fed". This has always been my biggest concern.

     

    Do you think they make it ?
    13 Jun 2013, 06:42 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Oddly enough, I expect they will get more support for the idea of price fixing from the Chinese (who of course now have a REE Cartel designed to do just that) than from their own Customers.

     

    Sojitz is the key. Their contract calls for max purchases of 8-9000 metric tons per year. Lynas recently announced plans to keep production below Phase 1 nameplate production (11000 metric tons) due to a soft market. If they can get Sojitz on board with some such scheme, they can make it.
    13 Jun 2013, 07:44 AM Reply Like
  • ungawah
    , contributor
    Comments (896) | Send Message
     
    If Lynas is having problems, what does that say about the prospects for MCP (price is holding up) and those further from production?

     

    I wonder if the Chinese are buying LYC shares at these bargain prices.
    13 Jun 2013, 09:52 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » MCP for a long time touted a new process for making light REEs very cheaply, even cheaper than the costs of the Chinese. I have always felt this was unlikely...

     

    Even so, MCP is selling into the same ex-China world market as Lynas. It will be interesting to hear MCP's take on this novel approach.

     

    I doubt the Chinese are buying Lynas shares in any organized fashion. They would have to register if they started to accumulate lots of shares, and the Australian government already blocked the sale of Lynas to the Chinese by NC years ago.
    13 Jun 2013, 10:26 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » More coverage on Lynas' plans to renegotiate its contracts:

     

    "Rare-earths miner Lynas Corporation has responded to spot prices for its products positioned below sustainable return minimums by developing a "minimum price schedule". The miner will offer customers contracts at above market rates on the justification that a guarantee of supply validates the higher prices."

     

    Meanwhile, China moves forward with their Cartel and its pet poodle, the International Rare Earth Exchange located in Inner Mongolia (also known as "Outer Beijing", LOL).

     

    It occurs to me that those sales contracts might well be re-negotiated successfully, but with new and subtle language regarding the terms. I wonder if they might not come up with a quantity modifier to offset price differentials, ie, Lynas would receive its $ for the contracted quantity, but add xx% more goods to compensate for a higher than FOB China price.

     

    Or maybe not. Customers could of course 'back into" the desired quantities based on forward-looking price estimates and game the system.

     

    It all boils down to how much a reliable supply of materials independent of China is worth to the customers.
    17 Jun 2013, 09:40 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Hi Trip,

     

    Would I be wrong in assuming that the Cartel would want to match Lynas' minimum?

     

    We're not in the same environment where the Chinese are looking to under the rest of the market. Also, given all of the political tensions between China and Japan, one would think that Lynas is in a good position to negotiate with their customers?
    17 Jun 2013, 01:01 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » I would think that the Chinese would be more likely to do whatever puts forward their geopolitical plan (which as I've explained several times before, has nothing to do with profits), whatever that happens to be. Under the "old" 10 year plan (now out with the old Politboro), they would still be smiling and undercutting ANY price so long as it protected their REE monopoly. They may yet do this, even should Lynas succeed in getting new sales contracts with "sustainable pricing". We are not certain whether or not they are satisfied with the quantity (60+% and counting of the entire value-added supply chain of REE-containing products) and quality of their high tech haul. My personal belief is that they have shifted to Phase 2, which is to corner the market on the manufactured product tip of the high tech pyramid, utilizing their lead in REEs as their primary weapon.

     

    Its easy to forget that dealing with a predatory nation state hiding behind a thin Cartel veneer is a very different exercise from what can be expected to happen in an open market. Governments are inherently price-blind, and the more predatory they are, the more myopic they get. China will give away REEs as party favors if it accomplishes what they want...

     

    OR lock them up tight and cut off all exports of anything EXCEPT finished goods.

     

    Or something in between, which might even resemble the workings of a "free market".

     

    Its unpredictable, and hence "unreliable". China is Lynas' most reliable argument in this case, but unfortunately there is a long history with governments and most companies that find them looking at the "current price" as the closest thing they do to "long term planning". They can buy x material TODAY at x price, and that is all that matters, and things will always be the same as they are today...

     

    As I said before, I believe Lynas stands a good chance to get some Japanese customers to go along with this deal, and if Sojitz is one of them, they are big enough to keep Lynas afloat. Sojitz is the key. It matters much less what all the others might do, though news that this customer or that customer will insist on their existing long term contract terms will put pressure back home on those who agree to amending their own contracts. This could also split the backers behind Sojitz, some of whom might go along, while others will seek a competitive advantage in the cut-throat high end market.

     

    Its a gamble.
    17 Jun 2013, 01:17 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Thanks TB! I appreciate your insight.
    17 Jun 2013, 05:16 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Well... this is interesting:

     

    Innovation Metals Signs Letters of Intent with Rare-Earth Exploration & Development Companies to Fulfill Phase 1 Toll-Separation Capacity

     

    TORONTO, June 17, 2013 – Innovation Metals Corp. (“IMC” or “the Company”) today announced that it has entered into non-binding Letters of Intent (“LOIs”) with three leading rare-earth exploration and development companies (“future producers”), for the toll processing of mixed rare-earth-element (“REE”) concentrates. These concentrates will be separated into high-purity rare-earth oxides (“REOs”) and other compounds, at an independent, centralized critical REE separation facility planned for Becancour, Quebec.

     

    Two of the future producers trade on the TSX Venture Exchange, with the third trading on the Australian Securities Exchange. They will toll feedstock concentrates rich in critical middle and heavy REEs, as well as neodymium (Nd), a critical light REE. In addition to the three new LOIs, IMC has an existing non-binding LOI in place with Geomega Resources Inc. (TSX.V:GMA), for the processing of Nd-rich concentrates.

     

    “We are delighted to announce these LOIs with leading companies in the rare-earth sector,” commented Patrick Wong, CEO of IMC. “The LOIs now in place represent the fulfillment of the initial 7,500 t REO / year capacity that IMC is planning for Phase 1 of the Becancour separation facility, with the potential for additional capacity requirements from the same future producers.”

     

    More here:

     

    http://bit.ly/11K0991

     

    The Innovation Metals' project is Jack Lifton's and Gareth Hatch's baby. If they can get the $ it could be a contender and worth watching.
    17 Jun 2013, 06:37 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » This has been coming for a while, with the Geomega deal the first solid result (though the initial formation of IMC came earlier, of course). Definitely one to watch mid-long term.
    17 Jun 2013, 08:25 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » http://bit.ly/11lktkB

     

    Lynas forgives and forgets...

     

    Probably the smart thing to do, according to conventional wisdom, but there are some cultures where this is simply seen as a sign of weakness and fear. We will see how the determined opposition in Malaysia sees this move...
    18 Jun 2013, 09:15 AM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    I am sure the PR from this is more valuable than what they would have collected from a defunct green group. Quite significantly more valuable since that group probably has less money than the legal fees Lynas would have ended up spending just on filings alone.
    18 Jun 2013, 09:32 AM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5806) | Send Message
     
    My guess is a deal was made.
    18 Jun 2013, 10:01 AM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    Add that to it Rattie, I bet your right.
    18 Jun 2013, 10:19 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    New article from Lifton --

     

    Rare Earths And Rampant Resurgent Regionalization:

     

    http://bit.ly/13StzVW
    19 Jun 2013, 06:55 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Yep. One of the kindest explanations for forming a government-run Cartel with a global footprint I have ever seen.

     

    Assuming he wants TMC to be the "North American Regional REE Center", one must wonder who will man the other Regional centers? MCP just slips back to being a simple mining operation, I suppose...

     

    Perhaps GWM/LCM will be the European Center?

     

    And Lynas? Will they be the "Japanese" Center?

     

    As for Korea, I find that one of interest (perhaps that is where MCP relocates?)

     

    Regional Cartels for everyone. But maybe we call them something nicer.
    19 Jun 2013, 08:58 AM Reply Like
  • LT
    , contributor
    Comments (4605) | Send Message
     
    Every country u mentioned is highly dependent on REE's. So, is this the only feasible way to combat the Chinese cartel ?
    19 Jun 2013, 09:06 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Cartels (of any kind) are nauseating to any Libertarian such as myself, but like everyone I have to live in the real world and not hide behind ideological blinders...

     

    Europe has raised crops of national, regional and even global Cartels for over a century, so its not as if this is the first such example. Most of the time they are difficult to fight for any individual company or even industry without strong government backing. International organizations like the WTO were originally formed with the concept of forestalling their creation and opening up all markets to all people... But that was then and this is now.

     

    In a crony capitalist/socialist global system, Cartels are a natural development. Speaking as Americans (now to become meek members of the North American Regional Collective I suppose), we must elect leadership capable of withstanding the insidious power of such temptations... Or live with the consequences.

     

    I have in recent years been forced to tell fellow investors, friends and family... To choose carefully which crony they invest in, selecting the most likely cronies of the Political Party most likely to win the next election. This is the CORRECT investment, given the new realities, though certainly not the RIGHT investment, measured against our old capitalist beliefs.

     

    In this case, we are tasked to search out the most likely winning companies around which the collective governments will center their Regional Cartel... IF we see Jack's vision as accurate.

     

    I am very unsure. I still believe that China is constructing a GLOBAL Cartel (at the very least, one meant to possess broad international power, and that would probably represent a result following a very determined fight by the West). Jack's idea of Regionalization will require strong leadership arise from the ranks of Western leaders who have thus far shown a strong aversion to the battle.

     

    In the meantime, I see a result somewhat different, perhaps darker overall...

     

    BUT one that could be beneficial for the few Western miners selected by a successful Chinese REE Cartel as a supplier to their factories.

     

    I believe my concept is in line with the Chinese politboro's plans, but of course time will tell.
    19 Jun 2013, 09:15 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    I'd like to think of them as just "businesses" (silly me).
    19 Jun 2013, 12:01 PM Reply Like
  • aqwert
    , contributor
    Comments (934) | Send Message
     
    TB-- GW also has GWTI in its back pocket. That is just languishing there ... they are doing some DOD work on yytrium, I think.
    19 Jun 2013, 12:48 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    From the Malaysia Chronicle:

     

    Lynas Sees Good Returns From Gebeng Plant:

     

    http://bit.ly/11MpTRp
    19 Jun 2013, 04:00 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    Motionstrema: When I take that link, bitly gives me a warning about:
    ======================...
    Stop - there might be a problem with the requested link

     

    The link you requested has been identified by bitly as being potentially problematic. This could be because a bitly user has reported a problem, a black-list service reported a problem, because the link has been shortened more than once, or because we have detected potentially malicious content. This may be a problem because:

     

    Some URL-shorteners re-use their links, so bitly can't guarantee the validity of this link.
    Some URL-shorteners allow their links to be edited, so bitly can't tell where this link will lead you.
    Spam and malware is very often propagated by exploiting these loopholes, neither of which bitly allows for.

     

    The link you requested may contain inappropriate content, or even spam or malicious code that could be downloaded to your computer without your consent, or may be a forgery or imitation of another website, designed to trick users into sharing personal or financial information.
    bitly suggests that you

     

    Change the original link, and re-shorten with bitly
    Close your browser window
    Notify the sender of the URL

     

    Or, continue at your own risk to
    http://bit.ly/11MpTRp
    ======================...

     

    Whatcha think? Shall I trust it or do you want to re-post?

     

    HardToLove
    EDIT: JIC you don't cycle back here soon, here's one made with tinyurl.com.

     

    http://tinyurl.com/lnu...

     

    Tested and WFM (works for me)
    19 Jun 2013, 05:11 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Hi HTL,

     

    Thanks for reposting via tinyurl. The bit.ly link was generated by Seeking Alpha.
    19 Jun 2013, 06:47 PM Reply Like
  • ungawah
    , contributor
    Comments (896) | Send Message
     
    LYC closed at 0.405 in Oz last night and that's UD$0.374 to us. Glad to see it's holding its own
    21 Jun 2013, 09:06 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    Ungawah: But the ASX short sales jumped up again -~5.9MM. Had recently been as low as ~2.2MM (IIRC) and seemed to be centering around 4MM or so.

     

    Yesterday, LYSCF here had a ~1:1.5 ratio of "buys" (trades at the ask) and "sells" (trades at the bid).

     

    Strangely, LYSDY had ~3.7:1 b:s ratio.

     

    With the whole commodities sector, and (precious) metals specifically, getting decimated by USD spike and/or sector rotation, I'm not surprised that we are being held down and seeing increased shorts on the ASX.

     

    And we've seen apparent covering going on here.

     

    http://bit.ly/1azLPXL

     

    HardToLove
    21 Jun 2013, 10:49 AM Reply Like
  • jimp
    , contributor
    Comments (671) | Send Message
     
    With the whole rare earth sector on sale. What rare earth miners are you buying? Any at all? Are you loading up on the the ones that have heavies, or is the obvious choice Lynas Corp? Yes, I know Lynas has heavies. For heavies, Quest, Tasman, & Northern for example.
    They have good resources and much smaller outstanding shares.
    I understand that metallurgy/ economics still have to be worked out.

     

    Those listed might be able to avoid massive dilution this time around unlike Lynas, which started off much earlier, before supply became an issue,etc. Thanks
    23 Jun 2013, 04:40 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    Jimp; For me, for now, I'm doing small blocks of Lynas. With most of the political claptrap behind them and the share prices as low as they are, I'm looking for things to start to slowly rotate to the positive.

     

    ATM I'm just trading these small blocks so I don't get trapped sitting on a flat position for an extended period. At some point I guess they'll become a hold.

     

    HardToLove
    23 Jun 2013, 05:33 PM Reply Like
  • jimp
    , contributor
    Comments (671) | Send Message
     
    For me, it's hard to pass up buying Lynas considering they pretty much have it all stitched up. I just hope this sector isn't a dud.
    23 Jun 2013, 06:51 PM Reply Like
  • ungawah
    , contributor
    Comments (896) | Send Message
     
    Other people may also have high quality resources, but how many have as advanced a facility as Lynas' LAMP?
    24 Jun 2013, 08:45 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » I have believed for a while that the best bet is to look for those companies which China would like to own, and which will have a good chance of being a key supplier of raw materials for them in the future. China tried hard to buy Lynas, of course...

     

    Going forward the concept has been that the more heavy rare earths are the best positions, but I think this theory may have a troubling geopolitical dimension which needs to be worked out first.

     

    Tasman, Lynas, Northern, GWM, and even MCP all have strong political dimensions.

     

    Tasman has enjoyed some early local (Sweden) and regional (EU) support, and so long as this continues, it has a certain floor under it. Unfortunately it is also one of the lower quality projects, and that will make any progress more difficult and costly to exploit.

     

    MCP was thought to have a similar relationship with the US government, particularly the DOD, but that has proven to be a limp hand. I am currently discounting American concerns for a reliable REE supply, it appears those have vanished with the current REE glut. This can be re-visited in 6 months to a year when supplies start to tighten once again for critical elements, but I am seeing clear signs that the DOD has capitulated to the Chinese.

     

    GWM has many strategic Western customers for LCM/GWTI, but GWM persists in clinging to Chinese support to try to get their plans in gear. I suspect this could result in luke warm strategic support, even assuming they can overcome their current dark malaise.

     

    Overall the focus on the heavier elements has several assumptions which I think may NOT be safe:

     

    That Western governments and corporations will continue to need large supplies of key elements for manufacturing of high tech goods. Should China complete their current predatory plan to subsume ALL high technology manufacturing (my current estimate is that they are about 70% there already) the ex-China demand may be much smaller than currently thought, and most future growth will occur INSIDE China. With China creating high purity metals as byproducts of massive industrial mining operations, it is likely that they will be able to supply their own needs for long enough to essentially "wait out" the Western startups. I think they view the Western leadership as lacking in vision and smarts (and boy, do I agree with them), particularly since recent history so amply demonstrates those problems.

     

    This would indicate that what will be important going forward may NOT be a reliable supply of the broad spectrum of strategic minerals, but specific items saleable to China after they co-opt the core base of our technology.

     

    Those companies that have been courted by the Chinese are obviously on their radar screens. Though it is certain they would far rather own them outright, they will probably settle for accepting them as suppliers of raw materials.
    23 Jun 2013, 05:59 PM Reply Like
  • jimp
    , contributor
    Comments (671) | Send Message
     
    TB, I see your point about China being able to make rare earths as a by-product of larger metal productions. But then I have to wonder why
    the Chinese would try to buy such a massive mine like Lynas if they felt secure with the above. I thought the Chinese stated they see finite supplies of their heavies from ionic clays,etc. Plus, their demand will undoubtedly grow if they succeed with their "plan."

     

    With Tasman, "lower quality" seems a bit harsh. I agree that their concentration of rare earths are on the low side. But the location (close to infrastructure), and basket price are good.

     

    I believe NTU has Chinese investors. Even though Quest is very remote, they have one of the best resources. Also, there are other miners clustered in the area, so maybe a joint effort could be made with govt support for roads,etc..

     

    Namibia Rare Earths has a very similar resource to Northern (NTU),
    but feel NTU has a better shot.

     

    Thanks for your insight.
    23 Jun 2013, 06:42 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Monopolies are always looking to acquire potential competition. But that was the LAST 10 year plan (and the last politboro, now out of power). The new plan (which is a natural evolution from the last plan) is focused on pulling in the end user manufacturing rather than establishing and maintaining a raw material monopoly. Thus I am hoping that the likes of Lynas will switch from an "enemy of the state" to a favored supplier of raw materials to the glorious new factories all over China.

     

    The Chinese are playing a very complex geopolitical game here, but I can also see a day when they switch quickly from the major exporter of raw materials to the major importer of same. This is the best hope for companies like Lynas, imo.

     

    The Tasman problem will be how many megatonnes of overburden and low quality ore must be processed to arrive at what goes in their basket, rather than the list of elements. This is why government support is essential - the case is difficult to make based upon the cost of extraction and processing. I also believe that once it becomes known to the locals just how huge the holes will have to be to yield sufficient ore, this could also become an issue. The Scandinavians tend to be quite green in their outlook.

     

    Northern does indeed have some Chinese investors, including some large ones (And Arrafura as well). So long as they do not get too large (and the Australian government become concerned) this could, I think be an indication of potential long term prospects. The Chinese plan very long term, however, and this can require much more than the customary investment horizon used by most Western investors.

     

    Namibia has strong political risks (as Lynas discovered to their loss). It is one of the places I tend to avoid.
    23 Jun 2013, 07:29 PM Reply Like
  • Valley Boy
    , contributor
    Comments (2192) | Send Message
     
    I had read that Lynas was involved in Malawi, something about the validity of legal claims to the mineral rights.
    http://bit.ly/10LMtQb
    http://yhoo.it/10LMrI5
    Malawi doesn't seem to show yet in the mining jurisdiction rankings. Namibia does okay in them so far.
    http://bit.ly/ZrkPAq
    23 Jun 2013, 10:49 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » My bad. I get the 2 confused for some reason.
    23 Jun 2013, 10:55 PM Reply Like
  • Valley Boy
    , contributor
    Comments (2192) | Send Message
     
    I'm getting curious to see to what extent China or anybody else is interested in obtaining the rare earths from both countries.....
    23 Jun 2013, 11:01 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    McKinsey just out with some interesting reports on China:

     

    China’s next chapter: Tech, manufacturing, and innovation:

     

    http://bit.ly/19lw4pd

     

    also interesting:

     

    China’s Solution For Dealing With Chronic Pollution: Execute The Polluters:

     

    http://seekingalpha.co...
    24 Jun 2013, 02:22 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » LOL, Motion, you plugged a circular SA link in under the China Solution...
    24 Jun 2013, 02:26 PM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    That really messed up my head for a minute. I could not figure where the article went. Copper colander was spinning like crazy.
    24 Jun 2013, 04:43 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    I'm glad I can supply some humor.

     

    Perhaps China is on Lynas' side after all, it appears that they're doing more to crack down on illegal REEs.

     

    http://bit.ly/13so7IV

     

    So let's see, todays tally so far:

     

    1 - China cracks heads and throws 50 illegal miners in the brink

     

    2 - Threatens to execute polluters

     

    3 - Proposes higher taxes on REE Miners

     

    I'd say China wants Lynas to succeed.
    24 Jun 2013, 06:10 PM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    Quite possibly those polluters and illegal miners simply were not family members of the governing leaders. Family members tend to become very wealthy in a short period of time. hmmmmm......where have we seen that before.
    24 Jun 2013, 06:54 PM Reply Like
  • Valley Boy
    , contributor
    Comments (2192) | Send Message
     
    Here's a site following the Chinese rare earth story.
    http://bit.ly/10LMZxw
    23 Jun 2013, 10:54 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    The (not so) funny part about the Lynas pricing right now, if the currency-converted US$ price we might see today, $0.3493, will be the lowest since July 09's low of $0.32.

     

    So it's priced as if there's little-to-no added value, even considering dilution, since that time. The AUD/USD cross that week ranged from $0.8682-$0.8871. Right now it's ~$0.9188. So in currency conversion terms, we're pricing even further below.

     

    LAMP= $0 value (while, as TB suggests, China may be transitioning to a net importer of LAMP products)? Resolution of SLSM issues (at least for the foreseeable future?) = $0 value? Contracts in place = $0 value (at least this one may be understandable)? New CEO with better industrial experience = $0 value? Etc., etc., etc. ...

     

    Interesting to me, to say the least.

     

    HardToLove
    24 Jun 2013, 08:23 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » The share price appears to assume the company will be liquidating next month, and not selling its assets very well, at that.

     

    A hostile takeover is a possibility under these conditions.
    24 Jun 2013, 08:26 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    I'd like to add Alkane Resouces (ALK:ASX) to the list.

     

    Alkane reportably has a good deposit of HREEs, an offtake agreement with Shin-Etsu Chemical of Japan for tolling of Rare Earths, the Tomingley gold project due to come online by early 2014 and provide an additional revenue stream, Nobium and Zirconium deposits, support of the Australian government, good management that's investor friendly, and cash in the bank. Alkane has been running a pilot plant for several years and has resolved their metallurgy.

     

    The stock is under valued, especially now that commodities and the big hit the ASX took last week. Alkane is very cheap in my opinion. Lot's of positives here (IMO).

     

    Here's a recent article that mentions them:

     

    http://bit.ly/14sw1RR

     

    I also like Ucore and Matamec if you're long. I'm not too fond of Quest or Avalon at the moment. Their deposits are excellent, but there's so little infrastructure around them that it will take many years and lots of $ to make them viable. Ucore's deposit can be brought out via barge, and they have strong backing by local Alaska politicians. Matamec is working closely with Toyota and has $$$ and resolved the metallurgy.
    24 Jun 2013, 08:44 AM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    I have Ucore and have been stuck with it so to speak for almost 2 years now. I have relinquished it to the sock drawer, bottom left corner in the very back. Right next to NVAX.
    24 Jun 2013, 05:52 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Likewise. i'm curious to see if their ore separation technology "pans out". So far they've proven expert at mining the halls of local government and the DOD.
    24 Jun 2013, 06:00 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Speaking of Ucore, they just announced results from their ore sorting trial:

     

    http://bit.ly/11YB5KA
    25 Jun 2013, 04:02 PM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    Seems a very effective way to reduce processing useless ore. I wonder if they can put that at the mine so they are not shipping useless ore too the processing facility?
    26 Jun 2013, 10:02 AM Reply Like
  • Valley Boy
    , contributor
    Comments (2192) | Send Message
     
    Alkane finds a market for its niobium with a joint venture with Europeans.
    http://seekingalpha.co...
    17 Jul 2013, 02:26 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Thanks VB!

     

    Considering all the good news for Alkane, it would be nice to see the sp respond in kind. In time, I guess.
    17 Jul 2013, 08:25 AM Reply Like
  • Valley Boy
    , contributor
    Comments (2192) | Send Message
     
    I'm guessing that the longer this commodities down cycle drags on, the more likely the miners will see the need to pool their resources and capabilities in some more joint ventures. That should help the minor metals industry when it comes time to increase their profits at the start of any up cycle. The industry sits on very valuable assets but, at the same time, is too undercapitalized to exploit them. I'll be interested in following the strategies they work on to get business humming again.
    17 Jul 2013, 01:48 PM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    I am curious if the mining tax will be revisited now with Kevin Rudd coming back as the new prime minister.

     

    http://fxn.ws/138lfoj

     

    The opposition says they are against the taxes...

     

    http://reut.rs/136v84L
    26 Jun 2013, 09:40 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Rudd will be a brief interlude from Gillard, but Labor is in big trouble in these elections, and unlikely to get back in. It has been operating with a 1 vote majority gained from 2 traitors from the Conservatives who were diehard Warmists. What lost Gillard control of the party was directly attributable to the polls showing Labor will lose about half of their seats in Parliament. These are desperate politicians looking for a savior in Rudd. He's far more adept than Gillard, but its too late for this election, which if anything may happen even earlier than the scheduled September if the frictions within the Labor Party (and the tiny Green party plus the 2 traitor Con's) prevent him from forming a majority. I consider this quite possible, even likely, since the Greens and the 2 Green Conservatives are going to be unhappy with Rudd's far more accommodative policies regarding carbogeddon, cap and tax, and the infamous mining tax package.

     

    This coming BEFORE the September elections in Germany could be interesting, if it happens. A large Conservative victory in Australia might alter the stance of some of Lynas' European customers eyeing a likely Left/Green victory in Germany...

     

    It is subtle, but it could make a difference.

     

    I believe we will see Rudd act quickly IF he can form a government, though, so it should be an active month or two in the commodity news out of Australia.
    26 Jun 2013, 10:00 AM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    Anyone else having fits with SA today?
    26 Jun 2013, 09:58 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    What Happens When You Buy Assets Down 80%?

     

    http://bit.ly/11NgBpt

     

    I'd say this applies to the whole metals space.
    26 Jun 2013, 09:58 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » MCP: SEC says they have completed investigation, found nothing... AH trading sees MCP shares up...

     

    Congrats to the long suffering MCP shareholders.
    27 Jun 2013, 10:57 PM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    That MCP preferred is pulling down 27% plus. Now might be a good time to look.
    28 Jun 2013, 12:30 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Japan's Imports of China Rare Earth on Rise

     

    SHANGHAI, Jun 28, 2013 (Menafn - SinoCast Daily Business Beat via COMTEX) --Japanese media report that Japan has not diversified rare earth import sources, and rare earth from China maintains an increasingly rising proportion in Japan's imports.

     

    Japan's rare earth imports went up 19 percent year on year in the first four months, reaching 43 million tons. Rare earth from China accounted for 63 percent, 11 percentage points higher than a year ago.

     

    Japan also imported more from France and Vietnam, but most of the rare earth from the two countries were products processed with rare earth from China. Therefore, many believe that rare earth produced by China accounted for 80 percent of Japan's imports.

     

    Source: http://www.people.com.cn (June 28, 2013)

     

    http://bit.ly/15P0VmI
    28 Jun 2013, 08:32 PM Reply Like
  • ungawah
    , contributor
    Comments (896) | Send Message
     
    I guess once Lynas is cranking out plenty of product, Japan can switch some of that 43 million tons to them. Of course, the Lynas share of 43 million would be very, very, very small. ;-)
    29 Jun 2013, 09:00 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Global PMI numbers came in better than expected. Even Europe surprised to the upside. Let's hope this sticks.
    1 Jul 2013, 08:06 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    Motionstream: I wonder if that accounted for the nice action, albeit on low volume, for Lynas on the ASX last evening? The daily short was down to ~950K - the lowest I've seen recently (haven't been watching it all that long though). It's been running mostly around 4MM and sometime times down into the low 2MM level.

     

    Closed at AU$0.41, +3.5c on 15.9MM traded. At this hour, that suggests a ~US$0.375 price, a nice ~3c bump from the US$0.346 close Monday.

     

    The high was US$0.36 - let's see if it gaps up open in the U.S., as it does have a tendency to do.

     

    HardToLove
    2 Jul 2013, 05:13 AM Reply Like
  • ungawah
    , contributor
    Comments (896) | Send Message
     
    Looks like a market cap of about US$736 million for LYC. Isn't that roughly the cost of building the LAMP? MCP has a market cap of US$1.14 billion for comparison.
    2 Jul 2013, 08:13 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » JPM back when the Malay madness was bubbling estimated that Lynas stock was worth $.74 even if the LAMP was a complete write-off. Obviously, it is worth more with a completed and operating LAMP (LOL) and a supportive government re-elected to power in Malaysia vs the risk of a government inimical to Lynas.
    2 Jul 2013, 09:55 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Sorry Alexander, but I got a Warning on that Malaysia link. My firewall bounced it high and wide. Old news anyway. We reviewed dozens of those back before the lawsuits were dropped and the apologies were made.

     

    SA's system is more protective toward virus-hosting sites than many such boards.

     

    Also, the author of the instablogs (like this one) can delete such links. I hope you stick around and bring much new material to the blog.
    3 Jul 2013, 08:11 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    Here's the link for the "Time's Up for Lynas ..." article.

     

    http://tinyurl.com/n2f...

     

    HardToLove
    3 Jul 2013, 08:17 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Yep. Broken record Fuzzy. Waste of CO2.
    3 Jul 2013, 08:20 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    New Straits Times: Lynas has submitted plan for permanent disposal facility:

     

    http://bit.ly/1aH3ezg
    4 Jul 2013, 03:58 PM Reply Like
  • jimp
    , contributor
    Comments (671) | Send Message
     
    I see that Quest signed a letter of intent to sell ALL of its annual Zircon
    content. That's pretty good news. Some folks critisize heavy rare earth resources by saying it's mainly made up of Zr, like it's a "trash" metal. Well this at least takes care of all of their "undesirable" Zircon if you view that way.
    We know that besides its Zr, QRM has a good resource of heavies.
    9 Jul 2013, 01:17 PM Reply Like
  • ungawah
    , contributor
    Comments (896) | Send Message
     
    Lifton speaks:

     

    A Radical Solution For The Rare Earth Supply Crunch

     

    http://bit.ly/152uS3I
    10 Jul 2013, 08:10 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » I like Jack a lot, but I hesitate to conflate a complex auto manufacturing process with making the magnets that would go into the car's audio system or electric motor. There's a big difference between the two, and his analogy breaks down there.

     

    Actually, creating the raw materials which a magnet maker can easily convert into finished magnets would be far enough along the chain of production to yield good profits for the miner/processor. This is GWM's vertical integration philosophy, while Lynas has always stopped well short of that point. MCP is the only company I have seen with the full chain contained under their Corporate umbrella, and of course they are struggling.

     

    I believe that GWM's business plan makes a lot of sense, particularly for their size operation, and with their emphasis on strategic customers. Lynas is still building out their "horizontally" integrated plan, which unfortunately is more vulnerable to Chinese market manipulation (since it eschews more of the value-added downstream opportunity) than other plans might be.

     

    The one element not contained in this area is the response of Western governments to the Chinese REE cartel and their plans to control this entire industry (talk about vertical integration). Without the intervention of the powers in the West, all questions are rendered moot.

     

    This is one reason I retain hope for Lynas. They are going to be creating large quantities of the very things China will be seeking to import after they have driven their competition (primarily the Japanese) out of the high end tech markets, and China has begun to exhaust her own REE supplies at the very moment when her internal demand spikes.

     

    IF the West moves to create a firewall to protect its key tech industry and processes, Jack's ideas have a lot of merit.
    10 Jul 2013, 10:21 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    TB: "... and China has begun to exhaust her own REE supplies at the very moment when her internal demand spikes.".

     

    Unintended consequences of consolidation, driving the mom and pop operations out of business (needed for the environment)?

     

    So the tables slowly turn where the Chinese become dependent over time on imports from the ROW?

     

    And that affects current account balances and other critical things.

     

    HardToLove
    10 Jul 2013, 10:53 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Yes. China once controlled maybe 30% of the world's commercially accessible REE deposits. Now they have pulled those reserves down mightily, and I have seen estimates where their reserves are roughly half what they once were (and they might be lower than that).

     

    The key question is (as usual) "when". Timing is paramount.
    10 Jul 2013, 03:49 PM Reply Like
  • Joseph L. Shaefer
    , contributor
    Comments (1501) | Send Message
     
    Another nice day for MCP. I own zero shares and zero options, but a boatload of the busted converts. If this is a flash in the pan, I expect no movement in the converts. If MCP can consolidate here, the converts will see higher bids as well...
    10 Jul 2013, 04:05 PM Reply Like
  • ungawah
    , contributor
    Comments (896) | Send Message
     
    Wow! Up 6.5 cents last night in Oz. That's almost US$0.43 a share to us.
    11 Jul 2013, 07:12 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    Ungawah: And the USD/AUD cross had some strength too. Small, but nevertheless, more help maybe. And volume started to come back to Lynas on the ASX as well. Still low, but improving.

     

    HardToLove
    11 Jul 2013, 07:52 AM Reply Like
  • aqwert
    , contributor
    Comments (934) | Send Message
     
    http://bit.ly/12lJF7V

     

    Looks like they are doing something:

     

    Less Common Metals Limited, has successfully produced neodymium metal from oxide using an electrolytic reduction process. LCM ran the new electrolytic cell in full production mode meeting all environmental, health and safety compliance standards.

     

    A second strip casting furnace that was delivered in the first quarter of 2013 was recently installed and is now producing alloy for customer orders.
    12 Jul 2013, 10:56 AM Reply Like
  • LT
    , contributor
    Comments (4605) | Send Message
     
    2:17 PM Molycorp (MCP +4.7%) is upgraded to Strong Buy at Byron Capital, which sees it as in the best position to reap benefits as companies seek out reliable sources of rare earth minerals outside of China. Long-term, the firm doesn't think rare earth prices will decline below historical price levels, and thinks end users will find value. [Commodities, Quick Ideas, On the Move] 2 Comments
    12 Jul 2013, 08:19 PM Reply Like
  • ungawah
    , contributor
    Comments (896) | Send Message
     
    Lynas and a Proposed Pilot Plant in Tasmania
    http://bit.ly/16C9TnN

     

    This proposed plant has lit up HC in the last several days.

     

    "Lynas Corporation has proposed to develop a pilot plant at the Research & Technology Development Centre, Bell Bay, to prove an electrolysis process and produce up to 100 tonnes per year of Didymium and Lanthanum metals for up to a three year period."
    14 Jul 2013, 11:24 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    BOOM! Take that Fuzzy!

     

    HardToLove
    14 Jul 2013, 12:05 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Interesting. There are several electrolysis projects floating around the REE space. Tasmania must have some inexpensive power sources (this is the usual formula for locating major industry requiring copious cheap power to succeed, aluminum processing for instance). It could also be that there are tax incentives involved...

     

    Whether this will ultimately prove to be an economical alternative to current processing tech revolves around the cost and availability of electric power going forward. I have my doubts that future events will move this direction, short to medium term, and the longer term ideas drift quickly into moonbeam generator territory...

     

    Still, its likely to become all the rage soon, so best to get in early.
    15 Jul 2013, 07:34 AM Reply Like
  • ungawah
    , contributor
    Comments (896) | Send Message
     
    With so little news coming out of Lynas and the share price in the doldrums, it's good to find out that they are exploring new projects.
    15 Jul 2013, 08:30 AM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    Iceland is one of the low price leaders in electrical generation. That is why they have so many aluminum smelters in Iceland. Wonder if they will want in on this tech.

     

    The use geothermal for electrical generation.
    15 Jul 2013, 04:07 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Greenland has the makings of a world REE power (if they can shake the Danish anti-mining influence). And Iceland is not far away...
    15 Jul 2013, 08:01 PM Reply Like
  • Valley Boy
    , contributor
    Comments (2192) | Send Message
     
    It looks like Iceland is interested in developing its technology industry partly with more imports of Greenland's resources.
    http://bit.ly/1aMbDm7
    http://bit.ly/1aMbBui
    16 Jul 2013, 12:58 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    From SA Wall Street Breakfast: Must-know News.

     

    Australia to scrap costly carbon tax. New Australian Prime Minister Kevin Rudd plans to discard the country's carbon tax and introduce a less costly floating price emissions-trading system by July 1, 2014, a year earlier than planned. The scrapping of the tax is expected to lower government revenues by several billion dollars, so it will have to cut costs to compensate. Companies that could be affected include Peabody Energy (BTU), BHP (BHP), Rio Tinto (RIO) and Glencore (GLCNF.PK).

     

    HardToLove
    15 Jul 2013, 07:34 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » The anticipated additional revenue was based upon extremely rosy projections by the past administration - and was therefore just about pure fantasy. The more likely outcome, given conditions in their primary market (China) and the usual effect of greatly increased tax rates (greatly decreased economic activity and wholesale tax avoidance by adept corporations), the actual outcome will probably be far superior to what would have been reality vs moonbeam fantasies.
    15 Jul 2013, 03:05 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » URRE up over 20% today, looks like on this news:

     

    "Shares of uranium company USEC Inc. (NYSE: USU) are going nuts Monday, gaining 159% and briefly being halted after a circuit breaker was triggered.

     

    Looking around the sector, USEC is not the only uranium company moving and the initial move could be related to developments in Japan.

     

    According to reports, the Japan LDP election win could signal a restart to nuclear plants in the country. Currently all but two of the county's nuclear plants remain closed following the Fukushima Daiichi nuclear disaster.

     

    Elsewhere in the sector: Uranium Resources, Inc. (Nasdaq: URRE) +21%, Cameco Corporation (NYSE: CCJ) +2.5%, Uranium Energy Corp. (NYSE: UEC) +8.2%, Denison Mines Corp. (NYSE: DNN) +5.6%".
    22 Jul 2013, 02:11 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9584) | Send Message
     
    I was in Tickerspy earlier today and was surprised to learn that Uranium stocks are up over 28% today, and 64% for the month.

     

    REE stocks place second, being up 61% over the past month.

     

    Here's the list of all stock sectors up over the past month:

     

    http://bit.ly/12HFfYW
    22 Jul 2013, 02:56 PM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    Whats up with nuclear. Japan going to restart on the west coast.?

     

    http://nyti.ms/11aklUX
    22 Jul 2013, 04:57 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Lynas Upgraded to Overweight at JPMorgan Chase & Co. (LYC):

     

    http://bit.ly/18vR5tD

     

    YES!
    22 Jul 2013, 04:54 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Yes. Large short positions are covered, big customers have been satisfied with sufficient cheap shares, now let the good times roll!

     

    Mining-friendly interim government in place in Australia, with an even friendlier government waiting eagerly in the wings for the September elections.

     

    Could be a good time to contemplate the more beaten down Australian stocks...
    22 Jul 2013, 04:59 PM Reply Like
  • LT
    , contributor
    Comments (4605) | Send Message
     
    What's the best symbol to trade Lynas on Etrade?
    22 Jul 2013, 09:37 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » I believe you can use either LYSCF or LYSDY on Etrade, but verify the fee structure. Some brokers charge very high fees for trades on the ASX (this is true for Schwab, for instance), while others do not. If Etrade is too expensive, consider the ADR which is LYSDY. The ADR fees are very modest.
    22 Jul 2013, 09:41 PM Reply Like
  • ungawah
    , contributor
    Comments (896) | Send Message
     
    I own both LYSCF & LYSDY on ETrade and they have been treated the same. No extra charges on either.
    23 Jul 2013, 08:26 AM Reply Like
  • omgwen3rds2
    , contributor
    Comments (55) | Send Message
     
    http://bit.ly/12L4idQ

     

    Lynas Corporation Limited (ASX: LYC / OTC: LYSDY) will hold a conference call to discuss the Quarterly Report for the period ending 30 June 2013 that is due to be lodged with the ASX by 31 July 2013. Please click on the link below for details on how to access the conference call and/or the audio webcast.

     

    GOOD LUCK EVERYONE Muah Muah!
    24 Jul 2013, 05:59 AM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5806) | Send Message
     
    Trip, do you think their would be a sustainable benefit to a reverse split on Lynas?
    24 Jul 2013, 10:30 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » No. They are already a member of the ASX100 index. The fact that they trade OTC in the US is immaterial, their core is in Australia.

     

    What WOULD be beneficial (right now) is news that their "sustainable pricing" scheme had the support of primary customers like Sojitz. Until we hear from the Japanese keibatsu, its a big question mark.

     

    If Sojitz goes along, I believe they can operate at Phase 1 levels and become cash flow positive pretty quickly.

     

    I think that JPM will be coming out with a new analysis of Lynas and are just waiting for the CC and next round of financial and operating statements to do so...

     

    And the response of the customers, of course. The fact that JPM and MS both rate Lynas a Buy right now, prior to these events, is further support of the idea that the stock is strongly oversold. I don't like to see a reverse split even of an American company needing to uplist where these conditions are hanging over them.
    24 Jul 2013, 12:18 PM Reply Like
  • omgwen3rds2
    , contributor
    Comments (55) | Send Message
     
    FocalPoint Analytics, what i think is important is that in this up and coming quarterly report, Lynas is going to prove once and fall that it is a established producer of rare earth and ITS HERE TO STAY. I am confident, just watch and see =) *wink*
    24 Jul 2013, 12:16 PM Reply Like
  • omgwen3rds2
    , contributor
    Comments (55) | Send Message
     
    Assessement from another poster on the Deutsche Bank report in hotcopper. Hope you guys enjoy reading it:

     

    Finally had time to plough through the 100+ pages of the recent Deutsche Bank report on Lynas.

     

    The basic premise behind their sell recommendation is that they are predicting a US$20/kg basket price for the next 3 years, until 2016. Post 2016 they are actually quite bullish on Lynas and the RE industry in general. They think that supply will outstrip demand until 2016, at which time, demand will suddenly outstrip supply and RE prices will take off again. So they are more or less telling investors to avoid LYC until 2016, at which point the stock will suddenly become a strong buy.

     

    They also reckon that for FY14 'all-in cash cost' of production will be $33/kg, $24 for FY15, and around $20 for FY16 and beyond.

     

    As a consequence of the above assumptions, they don't think LYC will have positive EPS until FY17.

     

    While their conservative estimations re Lynas' 'all-in cash costs' over the next few years look reasonable in my view, I think the report has a number of serious failings:

     

    (1) It makes no mention of the fact that Baotou Steel are halting production for the next 6 months (despite the DB report being published 2 weeks after Baotou initially made that announcement), nor does it place sufficient emphasis on the huge efforts Chinese authorities are now making to end the black-market trade in REE (which DB acknowledges has been a major contributor to price falls over the last couple of years). These clean up efforts are already starting to bear fruit in terms of modest price rises – a point completely ignored by DB. As a consequence, since the report was published some heavy RE have achieved prices that DB weren't predicting to occur until 2016.

     

    (2) the fact that Baotou steel decided to halt production on the basis of the spot prices of a few weeks ago (roughly $20 FOB/$16 internal Chinese prices), tells us that they were not making money at those prices. Evidently, with new environmental controls now in place, legitimate/regulated Chinese 'all-in' costs (inclusive of production costs, corporate costs, interest payments etc) must be getting close to the $20 mark. On this basis, if DB's $20 FOB price becomes a reality over the next three years, then NO LEGITIMATE RE PRODUCERS (including Chinese producers) will be making money over the next 3 years.

     

    So the logical extension of the DB $20 prediction is that the entire legitimate global RE production industry will operate at a loss for the next 3 years. This seems to contradict basic micro-economics and defy common sense.

     

    (3) Reading between the lines a bit – and this an important point I think the DB analysts completely missed – what is really interesting about recent comments from Lynas, Baotou, and Moly, is that the recent $20/$16 prices represented a kind of industry threshold; basically, these companies are saying to the market if RE prices fall much further, these companies will have to close up shop, and there will be no legitimate RE industry; RE buyers will then be dependent 100% on the dodgy black market for supply. Given that this scenario is in no one's long term interests (other than chinese black market producers), economic fundamentals and common sense suggest that RE prices must continue to rise to a point the permits legitimate producers to make money over the medium term.

     

    In other words, the LYC sell off to 36c was predicated on the fact that only LYC was losing money at the spot prices of a couple of weeks ago; what I think we can now legitimately infer is that every legitimate producer was losing money at those prices – and this fact should give LYC shareholders some comfort.

     

    (4) What is a minimum price point in order to ensure a viable, environmentally sound RE industry over the long term? Keeping in mind that the basket price is only a crude indicator as to the prices that Lynas or anyone else is in fact getting for individual REE, the industry seems to be telling the market and buyers that sooner rather than later it needs prices in the region of $35 FOB/$27 domestic in order to be viable over the long term. I think recent price action indicates that a structural transition to a more sustainable price point has begun. I expect the LYC sp to slowly rise accordingly.
    25 Jul 2013, 04:05 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    Omgwen3rds2: Great post, sounds like decent news. I wonder just how much influence the DB report had anyway? How long to overcome its effects?

     

    If the reality of the points you post has hit home in the customer base, then Lynas customers ought to be in a good frame of mind to think about some contract adjusts sooner rather than later.

     

    Let's hope we hear some news on that front soon.

     

    HardToLove
    25 Jul 2013, 05:18 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » DB has one thing in common with all the other pundits - they KNOW that smuggling has been temporarily rampant, and crashed prices - but they do all their figuring based upon "official" numbers, with those numbers crunched through a process based on the assumption that there is something close to a free market.

     

    I can recall some very entertaining articles which did the same thing with diamond prices, creating a fantasy world in which DeBeers did not exist.

     

    The reality is that the Chinese REE Cartel is real, and its almost finished its construction phase (which in turn means that the last shipments of smuggled REEs from defunct private operators is also almost finished).

     

    Chinese efforts to curtail smuggling will (by some odd coincidence) neatly dovetail with the exhaustion of the myriad of REE hoards created when the Cartel crushed the private (and privateer) REE producers.

     

    Another point of intersection for action in this space is the attempt by Lynas to get higher prices from its customers, chiefly Sojitz. This is coinciding with the other things outlined above, and the short term outcome will depend to a large extent on how their current shipments from their sources in China are performing, plus just how much of a stockpile they have been able to create over the past year during the Cartelization process. Sojitz is a Japanese keibatsu, and a past master at negotiations of this kind. If it would serve them for Lynas to shut down and enter mothballs while waiting for the market to improve, they are quite capable of forcing that outcome. As one of Lynas' largest creditors, they also have to factor in whether they would like to create a situation where they could end up owning a very large piece of Lynas' assets.

     

    The scenario is highly unusual and fraught with risk, as always. Lynas is the original drama queen for investors.

     

    I am hoping that we might see some important clarity come out of this upcoming round of CCs and reports...

     

    The hotcopper commenter has it right.
    25 Jul 2013, 07:15 AM Reply Like
  • omgwen3rds2
    , contributor
    Comments (55) | Send Message
     
    Hi HTL

     

    "Let's hope we hear some news on that front soon."

     

    You will hear the news by Wednesday next week. Wednesday will mark the turning point where Lynas proves to the world that its a viable producer of Rare Earth. A New Era has begun.
    25 Jul 2013, 11:51 AM Reply Like
  • omgwen3rds2
    , contributor
    Comments (55) | Send Message
     
    HTL,

     

    I reckon in my personal opinion is the best time to start accumulating Lynas shares. I believe i only need 30 days to proof my point and the chart will confirm my belief. Lets wait and see.
    27 Jul 2013, 10:24 AM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    Great post OMG.
    25 Jul 2013, 11:43 AM Reply Like
  • omgwen3rds2
    , contributor
    Comments (55) | Send Message
     
    Praseodymium prices soar beyond $100/kg in Europe as stocks dry up

     

    LONDON (Metal-Pages) 25-July-13. Traders have expressed surprise at the speed at which praseodymium oxide prices have raced beyond the $100/kg level despite very little consumer buying though speculative interest has been reported.

     

    One European trader said he's received a number of quotes from Chinese exporters at $103/kg and $105/kg and a second European trader said he was quoted just under $110/kg. “There's no consumer buying,” the first trader said. “I'm only hearing of some speculative buying by large trading houses.”

     

    Just a few weeks ago praseodymium oxide was trading at $75-80/kg and a few months back it was closer to $50-60/kg. Also, a number of traders in Europe appear to be no longer holding stocks of praseodymium oxide.

     

    The second trader said he's been trying to fulfill a large order for a European buyer for several weeks, but has not had any success in securing material. “Suppliers are very slow in responding with prices,” they said. “I see signs that some consumers are considering doubling their normal orders just in case.”

     

    Nonetheless, consumers considering increasing orders for contingency purposes are still in a small minority, according to traders. Many are too preoccupied with conserving cash due to poor economic conditions in Europe and still others believe the price rise is little more than a short term blip, which will fade away by September.

     

    There were earlier reports of an aggressive seller of praseodymium oxide in Europe, thought to be Molycorp owned Silmet in Estonia, but traders think that selling may now have dried up.

     

    The cause of the spike in praseodymium oxide prices, which is mainly used by the glass and ceramics industry, is that Chinese producers are not separating out enough of it from neodymium compounds as they've not found it profitable enough. Another reason is the clamp down by the Chinese government on smugglers, which unlike previous efforts appears to be having a considerable impact on volumes of illegal material.
    25 Jul 2013, 11:48 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Great post(s) everyone! Thing's (might be) turning around. Let's hope.
    25 Jul 2013, 11:53 AM Reply Like
  • omgwen3rds2
    , contributor
    Comments (55) | Send Message
     
    I am going to source to you guy these links that i used to determine when the REE market has turned. These two sites are my absolute BIBLE, a must have for any serious REE Investor. I notice this site predicted REE turn around 1 MONTH before lynas share price turned. You can almost focus the longer term price action by monitoring the price of REE oxides on these websites.

     

    They give you 1 week free trial BUT usually glancing at the title heading of the articles will give you a feel.

     

    http://bit.ly/13fSwbk

     

    http://bit.ly/13fSwrC
    25 Jul 2013, 12:08 PM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    OMG, thanks for the source.
    25 Jul 2013, 12:14 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Thank You!
    25 Jul 2013, 01:52 PM Reply Like
  • omgwen3rds2
    , contributor
    Comments (55) | Send Message
     
    Higher praseodymium oxide quotes hit RMB500,000/tonne on supply tension

     

    BEIJING (Metal-Pages) 26-Jul-13. Higher offers of about RMB500,000/tonne for praseodymium oxide have been reported in the Chinese domestic market during the past few days on support from tight domestic supply.

     

    The lack of supply, caused by reduced output due to a lack of profitability for separating praseodymium oxide from praseodymium/neodymium oxide, has been pushing up praseodymium oxide prices during the past weeks. Coupled with strong praseodymium/neodymium prices, praseodymium oxide prices have seen a marked rise.

     

    Meanwhile, bullish market expectations have been encouraging some suppliers to hold on to stocks, which also contributes to supply tension domestically and pushes up prices.

     

    A source at a southern supplier said that he is quoting RMB500,000/tonne for the oxide.

     

    “Some buyers will accept the increased price for small purchases to meet operational needs,” an executive at the southern company said.

     

    A trader source told Metal-Pages that the company bought some praseodymium oxide at about RMB485,000/tonne from a producer and will not sell the material at less than RMB500,000/tonne.

     

    The source added that it is difficult to obtain praseodymium oxide even at high prices because many suppliers want to push up prices further and are not keen to sell stocks.

     

    In addition, as reported by Metal-Pages, traders in Europe have expressed surprise at the speed at which praseodymium oxide prices have climbed beyond the $100/kg level despite very little consumer buying, though speculative interest has been reported.

     

    One European trader said he has received a number of quotes from Chinese exporters at $103/kg and $105/kg, and a second European trader said he was quoted just under $110/kg.
    26 Jul 2013, 12:33 PM Reply Like
  • omgwen3rds2
    , contributor
    Comments (55) | Send Message
     
    BEIJING (Metal-Pages) 26-Jul-13. China’s rare earth prices have been firming during the past week as bullish suppliers have raised their offer prices on support from strict government action against illegal rare earth operations as well as talk of national stockpile buying for rare earths.

     

    China’s Ministry of Industrial and Information Technology (MIIT) looks set to cooperate with many other government agencies in its national crackdown on illegal rare earth operations, according to a report by Shanghai Securities News.

     

    The campaign is likely to spread into Baotou in the near future, which will force more producers to halt operations. Market sources believe that the government crackdown will support the recent price rebound even though downstream consumer buying is less buoyant than expected.

     

    Meanwhile, MIIT is also set to introduce a new policy to promote the development of downstream rare earth applications and boost the current sluggish market.

     

    PRASEODYMIUM/NEODYMIUM

     

    Praseodymium/neodymium oxide prices have been holding steady during the past few days although some suppliers are still offering at high levels for the oxide and expect prices to rise much higher in the near future.

     

    Offer prices for 99% praseodymium/neodymium oxide are holding in a range of RMB340,000-360,000/tonne, and some business has been done at RMB320,000-330,000/tonne recently.

     

    Some 99% praseodymium/neodymium metal has been sold at about RMB430,000/tonne recently and many suppliers are not keen to sell stocks now owing to expectations of higher prices of about RMB500,000/tonne in the coming weeks.

     

    DYSPROSIUM

     

    A little business for 99% dysprosium oxide has been done at RMB2,200-2,300/kg during the past few days and more suppliers have raised quotes to about RMB2,600/kg.

     

    EUROPIUM

     

    A number of Chinese suppliers are offering RMB4,500-5,000/kg for 4N europium oxide with many of them reluctant to sell material due to expectations of much higher prices in the days to come on support from upcoming national stockpile buying in August or September.

     

    Some business for the oxide has been done at about RMB4,100-4,200/kg in the past few days with a number of consumers restocking on a hand-to-mouth basis to meet their operational needs.

     

    Meanwhile, some sources reported that exporters raised export quotes for the material recently following the rise in domestic prices.

     

    Export offers of about $870-880/kg for the oxide are reported in the market. However, some sources said that current export prices are likely to be at least at $900/kg owing to much higher prices in the domestic market in the days to come

     

    TERBIUM

     

    Many suppliers are offering RMB4,000-4,200/kg for 4N terbium oxide, and some small packages have been sold at about RMB3,600-3,700/kg with consumer buying still slow.

     

    PRASEODYMIUM

     

    Higher offers of about RMB500,000/tonne for praseodymium oxide have been reported in the Chinese domestic market during the past few days on support from tight domestic availability.

     

    A trader source told Metal-Pages that the company bought some praseodymium oxide at about RMB485,000/tonne from a producer and will not sell the material at less than RMB500,000/tonne.

     

    LANTHANUM

     

    99% lanthanum metal prices are holding at RMB50,000-53,000/tonne, and some suppliers are quoting RMB55,000/tonne, similar to prices in the past few weeks.

     

    Meanwhile, 99-99.9% lanthanum oxide prices are ranging between RMB27,000-30,000/tonne, little changed in the past days.

     

    -By Margaret Xue in Beijing
    26 Jul 2013, 12:33 PM Reply Like
  • omgwen3rds2
    , contributor
    Comments (55) | Send Message
     
    This paragraph VERY IMPORTANT. Think about the implications. The campaign by the CHinese government focuses on region to region. First region crackdown is on the middle and the heavies aka Jiangxi region. NEXT CRACKDOWN is on the Light rare earth region Baotou Region

     

    "The campaign is likely to spread into Baotou in the near future, which will force more producers to halt operations. Market sources believe that the government crackdown will support the recent price rebound even though downstream consumer buying is less buoyant than expected."
    26 Jul 2013, 12:35 PM Reply Like
  • omgwen3rds2
    , contributor
    Comments (55) | Send Message
     
    Baotou Steel Rare Earth raises listed prices for Pr/Nd

     

    BEIJING (Metal-Pages) 29-Jul-13. Market sources reported today that Baotou Steel Rare Earth has raised its listed prices for praseodymium/neodymium metal and oxide.

     

    The company’s current listed price for 99% praseodymium/neodymium metal is RMB450,000/tonne, compared to about RMB430,000/tonne for metal in the market.

     

    Market sources reckoned that the high listed prices from the northern giant will support domestic praseodymium/neodymium prices in the short term.

     

    Some sources however reported that the company is also reluctant to sell stocks of praseodymium/neodymium because of expected higher prices in the coming weeks.

     

    Market players forecast that national stockpile of rare earths as well as a government crackdown on illegal rare earth operations is likely to continue to push up rare earth prices.

     

    Baotou Steel Rare Earth's raising of listed prices could support market prices, which might also lift prices for the national stockpile purchases
    29 Jul 2013, 07:12 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    "Market players forecast that national stockpile of rare earths as well as a government crackdown on illegal rare earth operations is likely to continue to push up rare earth prices."

     

    Up, Up.... And Away!
    29 Jul 2013, 09:29 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » They miscalculated their policy. The idea was to use the building of the national stockpile to absorb spare supplies set loose when they wiped out the private (and privateer) REE businesses. But they set the prices too low, so the smugglers and the defunct REE producers opted to sell/smuggle ex-China. The current pricing is testing the waters to see how much is left that they might be able to pickup cheap (probably from the more timid remnants of the private REE businesses).

     

    This phase should not last very long, and may be followed by a general increase in prices as they begin to use the new Cartel and exchange to set prices and put pressure upon their true target, foreign competition for the highest tech finished product manufacturing.

     

    The next news regarding upcoming export quotas should be revealing...
    29 Jul 2013, 10:04 AM Reply Like
  • omgwen3rds2
    , contributor
    Comments (55) | Send Message
     
    Read Here: The price is confirmed by more green in REE prices

     

    http://bit.ly/16eNbW7
    29 Jul 2013, 09:57 AM Reply Like
  • omgwen3rds2
    , contributor
    Comments (55) | Send Message
     
    ANALYSIS: Rare earths price shock could hit European consumers from September
    LONDON (Metal-Pages) 29-July-13. European consumers could be in for a surprise when they return to purchase rare earths from September onwards and find that the prices of many elements have become considerably more expensive over the summer.

     

    “There is still disbelief among many consumers that prices are firming,” a European trader said. “Many think it is just temporary and prices will start falling again.” They said they have been advising their clients to do some precautionary restocking, but the advice has largely been ignored. Many buyers are currently out of the market anyway due to the traditional summer slowdown in Europe

     

    A second trader said there has been some investor interest but little in the way of consumer buying with maybe only a few considering increasing their normal orders in case rare earths prices are due for a sustained recovery. “But overall I don't think consumers believe this is for real,” the second trader said. “They have got so used to seeing falling prices.”

     

    Other traders and industry sources have expressed similar views about the European market. Traders have noted that a growing number of European consumers are buying on a hand to mouth basis and maintaining very small stocks. Due to falling prices many traders have also kept low stocks for fear of racking up big losses. Many consumers have been more preoccupied with the state of the markets they sell into due to recessionary conditions in European markets.

     

    Traders warn that with prices already moving up on so little spot market demand could increase even faster when consumers come back to restock from September onwards. Among the hardest hit from price rises could be the glass and ceramics industry, which is very price sensitive and has a tendency to buy on a hand to mouth basis. Other industrial users such as alloy and magnet makers tend to purchase on longer-term contracts so should have more time to prepare for price rises if they prove sustained.

     

    Speculators sense a turn in the market

     

    However, if consumers are not sensing a turn in the market, others are. Metal Pages has heard ongoing reports for several months now of speculative buying by trading houses, and even private investors are purchasing material in the belief that the price rebound will be sustained. Their inclination will be to fully exploit any market tightness that occurs to obtain much higher prices.

     

    The reason for the price rises is China's clamp down on illegal rare earths mining and smuggling, which has been more vigorous than previous efforts and this time appears to be having an impact on the availability of material on the global market.

     

    Many industry sources believe that illegal rare earths exports are the equivalent of anything up to 100% of official exports meaning that a significant curb should take a lot of material off the market. Less competition from illegal exports will make it easier for the Chinese government to impose its will on the market.

     

    “We've also heard reports from Hong Kong that Chinese customs officials are holding up material at the border, “ the first European trader said. “This could also contribute to higher prices in Europe.” Hong Kong is a major gateway to the world market for smuggled and official material.

     

    China's government tightening its grip

     

    At the same time official producers are being consolidated into larger groupings, which are easier for the government to control and there are increasing efforts to add value to rare earths domestically. Also a number of official Chinese producers temporarily shut-down production or scaled back output in a bid to support prices. Some industry sources believe these cut backs will need to be sustained for a long time to decisively to sustain rising rare earths prices.

     

    But for the time being a growing number of elements are seeing rising prices in Europe. For example, praseodymium oxide scaled the $100/kg level last week and even erbium oxide, until recently on the slide, started posting a recovery hitting levels of $80-90/kg. A number of heavy rare earths are also seeing price rises. Others such as neodymium oxide are holding steady around $60-65/kg.

     

    Only cerium and lanthanum oxide at prices of around $6.50-7.50/kg and $6.00-8.00/kg respectively remain in the doldrums and could still face further falls – due to substantial stocks and an increase in non-Chinese production. Nonetheless, even for those two elements there are widespread reports of speculative buying.

     

    As reported earlier by Metal Pages, the market is also being buoyed by rumours that the Chinese government is due to shortly begin stock piling rare earths again. The elements mentioned in the context of this rumour are praseodymium/neodymium, terbium, dysprosium and europium. Any such measure is likely to support the market and encourage producers to hold out for higher prices.

     

    But are price rises sustainable?

     

    There are question marks over whether the price rises can be sustained for long. “The missing element is demand. It just isn't there,” the first trader said. “So I think it is too early to say that the market has definitely turned.”

     

    An industry source made the same point. “We're not seeing much pick up in demand,” they said. “And it remains to be seen just how successful the (Chinese) government will be in stopping illegal production and for how long official producers will restrain their own output.”

     

    However, the second European trader is more bullish. “With the exception of cerium and lanthanum, I think rare earth prices are on the up now,” they said. “With less supply coming into the market price rises should be sustained.” A third European trader agreed and also sees a greater commitment by the Chinese authorities to rein in supplies and push prices higher to encourage conservation.

     

    Corruption will keep illegal material coming

     

    However, the first trader doesn't believe rare earths smuggling and illegal production will ever be stopped as the officials responsible for eradicating it actually profit from it themselves through corruption. There are well established illegal supply chains for rare earths in China stretching into countries such as Vietnam.

     

    The new Chinese regime is currently cracking down heavily on corruption and has held a number of show case trials of corrupt officials to make examples out of them. Ostentatious displays of wealth by officials is also being frowned upon and this has even impacted the sale of luxury goods in China.

     

    However, China watchers point out that these sort of crack downs have taken place before and have never really succeeded in clearing out corruption for good.

     

    “I think many of these corrupt officials see it as in their interest to reduce illegal mining and to get higher prices,” the first trader said. “If prices keep falling they lose out as well and eventually it just isn't profitable for anyone.” Also, visible signs that illegal mining and smuggling is being reduced will please the central government in Beijing.

     

    The moment of truth is likely to come in September when buyers start scouring the market for material. Whether or not prices move up will depend on availability, but it does appear that stocks have been steadily moving into the hands of those who want higher prices, such as speculators.

     

    -By Justin Pugsley in London
    30 Jul 2013, 01:32 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    "Many industry sources believe that illegal rare earths exports are the equivalent of anything up to 100% of official exports meaning that a significant curb should take a lot of material off the market. Less competition from illegal exports will make it easier for the Chinese government to impose its will on the market.

     

    “We've also heard reports from Hong Kong that Chinese customs officials are holding up material at the border, “ the first European trader said. “This could also contribute to higher prices in Europe.” Hong Kong is a major gateway to the world market for smuggled and official material."

     

    ===

     

    Hopefully this will help Lynas negotiate better terms with their customers going forward.
    30 Jul 2013, 10:42 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    Motionstream: Same thing I was thinking and I suspect that just the rumors of this has already caused some engagement.

     

    HardToLove
    30 Jul 2013, 11:29 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Yes, the cc should be very interesting.
    30 Jul 2013, 02:13 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » "Lynas Corporation Limited (LYC) reported their quarterly results, selling 117 tonnes of product from its its newly commissioned Malaysian refinery for $600,000 during the three months to the end of June. The sales revenue was low, however a promising result when put in perspective with the to get an operating licence, due to ongoing lawsuits and political problems involving opposition from local and foreign environmentalists. The quarterly revenue represents just $5.10 a kilogram, compared to an estimated current price of about $29 a kilogram with Lynas' cost guidance at $14-$15 a kilogram for 22,000 tonnes a year of production. Soon LYC will be able to ramp up the costs as it builds a client base, as it had been previously selling at a lower than market value in order to be qualified by customers."

     

    Yuck. Not really encouraging, and the sales were worse than underwhelming, with $5.10 per kilo a low price even for qualification samples.

     

    BUT the questions revolving around forward looking issues like pricing are much more important, imo. Stay tuned for the full release of information and the CCs...
    31 Jul 2013, 10:13 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    TB: I was reading earlier this A.M. - not done as I multi-task. Thanks for the take.

     

    HardToLove
    31 Jul 2013, 10:26 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » http://bit.ly/19xgNRH

     

    Full article.
    31 Jul 2013, 10:50 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » http://bit.ly/19xh8Ux

     

    More overall background sources for the REE sector.
    31 Jul 2013, 10:52 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » http://bit.ly/17ifrUE

     

    Malaysian luddites are still losing consistently, though it takes some digging to find out...
    31 Jul 2013, 10:53 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » "Lynas sold its rare earths for the equivalent of a little over five dollars a kilogram. Production costs, however, were almost 20 dollars a kilogram.

     

    Eric Noyrez, Lynas' CEO says the result is disappointing.

     

    "Rare earths market volumes and prices have been extremely challenging for the past six months," Mr Noyrez said.

     

    Lynas sold 117 tonnes of refined product in the period - a long way short of its phase one target of 11,000 tonnes for the year

     

    It reported equipment problems and processing times that were longer than expected."

     

    Sigh. Teething problems again. Not dissimilar to what MCP went through 2 years ago, and what we can expect when GWM cranks up in South Africa. Normal, but yes, disappointing (though to be fair to the new CEO, the disappointment is probably more to be blamed upon the prior CEO's habit of raising expectations than anything Noyrez has done).

     

    Still no word on "sustainable pricing". I consider THAT a disappointment.
    31 Jul 2013, 02:36 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » http://bit.ly/13A7mbW
    31 Jul 2013, 02:40 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » $5.10 per kilo? The wonder is not that Lynas only produced 117 metric tonnes of REOs, but that they bothered to produce any for such a large loss. Right now they are losing about $15 on every kilo produced...

     

    Noyrez has some 'splaining to do...

     

    At $20 per kilo production cost those 117,000 kilograms lost them about about $1.7million.
    31 Jul 2013, 02:48 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5806) | Send Message
     
    #*%&* !!
    31 Jul 2013, 03:00 PM Reply Like
  • froggey77
    , contributor
    Comments (2768) | Send Message
     
    FPA
    Thanks for the succinct summation of the facts.
    31 Jul 2013, 06:28 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » I agree. More satisfying than my own mild "yuck".
    31 Jul 2013, 07:18 PM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    I am wondering if those who purchase this ree might not want to bother with a new process until it is verified that they can produce to the production puritys claimed. If the stuff did not meet spec they might lose a lot of production or require a lot of testing so they will only buy it at a cheap enough price till they verify it works in their production line. Still have not red the links above so my comments may by a bit premature. WAG (wild a$$ guess)
    1 Aug 2013, 11:11 AM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5806) | Send Message
     
    That was what I call an ugly conference call.
    I disagree with the decision to implement the development of increased production capacity at this time given that they can't sell it and make a profit. I think that decision conflicts with their stated goal of minimizing working capital requirements. So why spend the money now? My guess is that it lets them access the tranche of capital earmarked for production expansion and use it to keep the doors open.

     

    Consider the following exchange which I have slightly rearranged to put into understandable English:

     

    ---
    Unidentified Analyst:
    ... you’ve had basically 5 out of 91 days of production. According to previous announcements, you’ve stated you’ve had normal startup issues not materially impacting the overall production ramp-up schedule. However, I would categorize five out of 90 days of production as a disaster. Those are severe, severe production issues. And for us to be hearing about that on a quarterly basis and not continuously is unacceptable... we basically won’t know the status of the company’s production until October.

     

    Eric Noyrez:
    Bla bla bla.. As I said we reached the nameplate capacity, in fact in leaching early June ...

     

    Unidentified Analyst:
    Yes, Eric BUT for how long? You can reach nameplate capacity for 10 seconds and you announce that. However, the key is sustained nameplate capacity and you know that’s the case. That’s really what the market wants to know because we can run numbers on that. We can’t run numbers on vague disclosure about nameplate capacity because you’ve shown by your results that it means nothing... the information is not usable.

     

    Eric Noyrez:
    Bla bla bla...

     

    Unidentified Analyst
    So for stage of life for September, we may assume that you will only produce another couple of 100 tones rather than say 2,700 tones or anywhere near it, given that we’re already a month into next quarter?

     

    Eric Noyrez:
    You’re correct.

     

    Unidentified Analyst
    Are you happy with that Eric?

     

    Eric Noyrez:
    Yes.

     

    Unidentified Analyst
    I must be in the wrong business.

     

    Eric Noyrez:
    I’m sorry. What did you say? Are you happy with your comment? Hello?
    ----

     

    They got nailed on not being sufficiently open to allow investors to evaluate the business. I am unimpressed with Noyrez's performance in the conference call. I saw that the company announced nameplate capacity in recent press releases. I assumed they were producing at nameplate capacity, and that they recently ramped down production because of low prices. Now I learn that they achieved nameplate capacity for a limited period of time, and that in fact they have achieved 5% operations in 90 days (5% operating) and that the key reason for reduced production was apparently process issues and equipment failures. Add to that the decision to spend capital on increased production capacity when they know they can't sell it profitably, and a different picture emerges.

     

    I think Noyrez claims that they will be cash positive by the end of the financial year is overly optimistic. It's optimistic because the claim is based on price recovery, and that factor is not under the control of Lynas. Back in the early days, we thought everything would be smooth sailing once the LAMP was operational. Now we know they are selling product at a substantial loss.

     

    Is there any hope for investors here?
    1 Aug 2013, 05:21 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » "I disagree with the decision to implement the development of increased production capacity at this time given that they can't sell it and make a profit. I think that decision conflicts with their stated goal of minimizing working capital requirements. So why spend the money now? My guess is that it lets them access the tranche of capital earmarked for production expansion and use it to keep the doors open."

     

    I think they are continuing the Phase 2 buildout because they have construction contracts that are either honored or go into default (and create a dead loss). If you are paying for construction, best to GET construction in return. Those monies are restricted anyway, and can't be used for anything else. I strongly doubt they are trying to steal from the restricted funds, those New York boys would notice...

     

    Buidling out Phase 2 can also help with the production problems occurring with Phase 1, ie, the new capacity can be tweaked to correct problems, and they can shift production to the portion of Phase 2 where the improvements are done.

     

    The bit about "nameplate achievement" IS annoying, and something I would have expected from the old regime, but it is very disappointing to see the cycle continue with the new. Reading a little between the lines of the surreal analyst/Noyrez exchange, however, I think there is more to learn. As I implied in my earlier comment, Lynas really should NOT be running more than the absolute minimum production UNTIL they fix the equipment and operational issues. Whether they can hit nameplate production levels or not, until the customer samples are accepted and orders created, AND production issues resolved, minimum levels of production used to iron out the mess and perhaps meet initial sample requirements are all that they SHOULD do.

     

    Of course, the Analyst was correct to point out that Lynas cannot have it both ways, ie, produce minimum quantities while yet claiming to have achieved nameplate 11kmt levels. The truth is that they are NOT operating at nameplate, and really cannot do so until they fix the LAMP.

     

    Another inference is that Noyrez expects the plant fixes to be in place "soon" (at least soon enough to enable them to run at a cash flow positive level by the end of the year), though I would like a more substantial timeline for that. Along with that estimate we see a slightly more rosy projection for REE prices (which of course falls in line with events in Europe and China).

     

    If the share price were $1.50 right now, I would expect the sky to cave in. If it were $.75 I would expect a 10% drop in reaction to the situation.

     

    At $.35 the current situation is already oversold.

     

    I don't think that Noyrez is a native English speaker, and I wonder how much that played into the tortured interview sequence... He might have been thinking it was obvious why they were not running the LAMP at 100% Phase 1 capacity given the problems, a decision he had already made, and confused when queried about being "happy" with that decision. After all, what other choice did he have? He had already admitted to being unhappy with the overall situation earlier... A classic contextual disconnect.
    1 Aug 2013, 09:11 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Yes, that was an ugly cc. Not what I was expecting to hear, however, I'm not really that surprised. Deep down I was hoping to hear better news, but, I think many of the start up issues are normal? (TB?).

     

    There's got to be a shakedown period and issues will arise, and given the current market conditions (for all commodities) they are trying to maneuver in a difficult environment.

     

    I read through the entire transcript and was happy to see that both the institutional and private investor on the call demanded more communication from Lynas. I think the company has done a very poor job of communication. Eric said: "Point taken". Let's hope they do indeed improve on that front.

     

    I'm willing to give Lynas a bit more time to get the ghosts out of the machine.
    1 Aug 2013, 07:42 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » I have made pretty blunt comments on this blog in the past (and gotten argued with, of course) that teething problems for new, innovative, and very large/complex industrial facilities ARE common. My primary complaint with management at this point is that we have been led to believe that they had managed to AVOID these pitfalls by building toward a VERY abbreviated final product list (just lanthanum and cesium, plus the mixed product didymium). In the REE processing world, these are baby steps, and of course leaves the remaining pantheon of REE elements all jumbled together in some byproduct form (though there is some hope they will ultimately be able to sell these via a tolling arrangement with others who can complete the refining process). When nameplate production was proclaimed, I (and obviously at least one Analyst) assumed that meant they had managed to avoid the point of initial failure via the sage advice of some of the old Rhodia hands... Except now we abruptly learn, not so much.

     

    I won't say that its reassuring to learn that Lynas and their European REE mentors are just as prone to mistakes as their Canadian/UK and American competitors, but it is also not really surprising.

     

    Its obvious that Lynas is one of those investments which one makes DESPITE the abilities of management (I believe I have said this several times before), who have once again been proven to be all-too human. I really have no explanation for why I suddenly lost my cynic's helmet when the news was released about reaching nameplate - THAT should have triggered a knee jerk reaction of "Oh yeah? So we can start adding about 2700 metric tonnes of REO production to the ledger for every quarter going forward from this point?"

     

    Lynas should anticipate that they have now turned their entire institutional and retail investor base into a band of cynics. Noyrez, the honeymoon is OVER, and, to repeat...

     

    You still got some 'splainin to do.
    1 Aug 2013, 09:28 AM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    Maybe we can start a petition to draft Elon Musk, he seems to have the magic touch. Maybe he can make Lynas into the next Tesla.

     

    Actually, I think Noyrez is good, but yes, the honeymoon is over, and Lynas needs to hire a Chief Communications Officer, ASAP.
    1 Aug 2013, 05:22 PM Reply Like
  • jimp
    , contributor
    Comments (671) | Send Message
     
    Do you guys think that even with the negative CC, Lynas is still the rare earth miner to buy right now? I noticed some of the others are trending up ie. QRM, TAS, NTU..

     

    It's hard to pass up Lynas at 0.35, but I don't want to be throwing money down the drain...
    Thanks for the good insight.
    1 Aug 2013, 06:04 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Its boiled down to an almost pure geopolitical game. Primary players are active in the field (Japanese keiretsu, Chinese REE Cartel, and various somnolent Western governments), and making moves and decisions based upon long term geopolitical (rather than short term economic) goals.

     

    Lynas is a key pawn on the board, but its difficult to determine what the players will do with it. The first moves from the Chinese have been made, and Lynas has initiated a gambit for "sustainable" prices, so the ball is in the Japanese court. Short term it all depends on what they do...

     

    Oh, and yes, its very probable that Lynas will eventually (perhaps even "quickly") work through their production issues and reach a point where they really COULD make 11kmt per year. That is a lesser question by far, than the important questions as to whether the Japanese will pay higher fees for a reliable non-Chinese source - or whether the Chinese will loosen their stranglehold on REE prices and allow them to drift upward.

     

    Beyond that lies the remainder of the game, which stretches out across the coming decades.
    1 Aug 2013, 07:24 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5806) | Send Message
     
    The way I see it, if we are not getting the truth out of the company, how can we make appropriate investing decisions? Bad news is one thing, lying or communicating with the intent to mislead destroys the one asset a company absolutely has to have - Trust.
    1 Aug 2013, 07:47 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » I would have to agree with this. Semantic games can be played about what is nameplate production and what is "nameplate production for more than 5 days at a time". Its obvious that this was not simply miscommunication. Releasing the positive news without releasing its conjoined negative twin was incredibly dumb, and that's putting the best possible face upon it.

     

    This reminds me of the old story about the stock broker who was summoned into a conference with his boss and informed that he was to cease drinking vodka immediately. The broker was confused by this instruction, and his boss obviously read his face for he then continued:

     

    "I'd rather our customers thought you were drunk, not stupid".

     

    Right now, our choices (barring some very good explanations, yet unfulfilled) are between stupid and lying. My first impression was not to buy the "stupid" part, EXCEPT...

     

    This was a particularly dumb lie. There's no way they could hide those problems.
    1 Aug 2013, 08:34 PM Reply Like
  • LT
    , contributor
    Comments (4605) | Send Message
     
    reminds me of AXPW when TG was promising the moon and was no where near having the automated sheeting process designed much less perfected. All they could do was make a few batteries by hand.
    This Lynas report is pitiful, and analyst will come with downgrades galore after the CEO made a fool of himself.
    1 Aug 2013, 09:44 PM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    I agree with you LT.

     

    This Lynas report is pitiful, and analyst will come with downgrades galore after the CEO made a fool of himself.
    2 Aug 2013, 07:40 AM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    Equipment failures may have occurred at nameplate production levels. The machine just can't run that fast. That is the thought in the back of my head. Now they have to fix that issue and its not a one day fix if they have to make something much more robust to handle that level of production. Not simply replacing a broken bearing per say they are reengineering with a bigger bearing is an example of what I am saying. Again a WAG.
    1 Aug 2013, 11:21 AM Reply Like
  • ungawah
    , contributor
    Comments (896) | Send Message
     
    Lynas has not been badly punished after the CC. Closed at AU$0.405 before the call and AU$0400 last night. That translates to US$0.356 for us. Even hit a high of AU$0.420 last night. Looks like the bad news had been already baked in.
    2 Aug 2013, 08:21 AM Reply Like
  • doubleguns
    , contributor
    Comments (7891) | Send Message
     
    Not getting punished simply because no one is selling out at these prices but apparently not much buying going on either. Limbo comes to mind.
    2 Aug 2013, 09:26 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » My earlier comment: "If the share price were $1.50 right now, I would expect the sky to cave in. If it were $.75 I would expect a 10% drop in reaction to the situation.

     

    "At $.35 the current situation is already oversold."

     

    Still true.

     

    I believe we have also learned something about the behavior of the share price: It was telling us a lot all along about what was coming short term (particularly as regards option trading and its impact).

     

    It is doubtful that we will see another episode of truth-stretching following this debacle. Just as we saw with MCP, the lesson will be learned (though at great cost). One DOES have to wonder who was counseling the new CEO in this matter, however...
    2 Aug 2013, 09:44 AM Reply Like
  • Mayascribe
    , contributor
    Comments (9584) | Send Message
     
    I agree with FPA, LT and trip, about how can one invest in a company when its leadership is flat out lying? A couple of weeks ago I was very close to picking up 30,000 shares, looked into how many shares had traded so far that day, which was oddly 30,000 by around 2PM, and then decided not to buy.

     

    After this deceptiveness, I'm not sure I will ever get back into Lynas.
    2 Aug 2013, 09:17 AM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Meanwhile, we see GWM's beaten-down shares rising recently, as the general REE sector slowly reacts to news of tighter supplies and higher prices for some elements.

     

    I believe the next galvanic reaction will come from the same source which has created the current situation, ie, China. As information concerning future export quotas and Chinese REE prices set by the Cartel is released, the sector will reorient based upon that controlling guidance.

     

    I believe we are near the revelation of a new direction for Chinese REE policy, and I have made my predictions already...
    2 Aug 2013, 09:48 AM Reply Like
  • jimp
    , contributor
    Comments (671) | Send Message
     
    Lynas was actually up today which is really surprising. As someone said before, this latest information might be all ready priced in.
    Do you guys believe it will go much lower than $ 0.35 ??
    2 Aug 2013, 05:19 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Thus far the stock price has been telling us the truth even while the company was telling lies...

     

    I am still laser focused on what the customers will say about sustainable pricing, secondarily on the REE prices, which can move quickly.
    2 Aug 2013, 08:11 PM Reply Like
  • jimp
    , contributor
    Comments (671) | Send Message
     
    Do you think those "lies" or "spin" about the production run was Lynas' attempt to curtail an all ready abysmal death spiral in the rare earth sector, or something more malignant?
    The poor pricing that was charged $5.00/kg, was due to this being almost a "trial run" or "first run" off their line?

     

    Wouldn't this be fairly normal "growing pains" for this type of operation?

     

    Thanks
    2 Aug 2013, 08:56 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » The growing pains would be normal, but the treatment of the "...full Phase 1 production nameplate capacity has been achieved..." announcement was terrible, and led directly to the nasty CC calls.

     

    I cannot think of a good excuse for doing this, particularly with a reporting period coming up where the truth had to come out. The mindset in the executive offices required to make this sort of thing the smart thing to do eludes me.

     

    It ranks right up there with NC's surreal attempt at "grand theft Crown Deposit". The arrogance runs in a similar vein.
    2 Aug 2013, 11:18 PM Reply Like
  • motionstream
    , contributor
    Comments (313) | Send Message
     
    "Wouldn't this be fairly normal "growing pains" for this type of operation?"

     

    In my experience, NOTHING, especially anything worthwhile, is easy, or goes smoothly from start to finish. When NC was running the show, he built up an unreasonable expectation among investors. He was a salesman and a showman. Noyrez is a manager. I believe that Noyrez is trying to communicate in an honest and unvarnished fashion, but some things are being lost in translation. If you take the time to read the transcript from the cc, you can see how he is struggling to answer questions. As TB pointed out above, English is not his native language. I'm not so sure that he, or Lynas was looking to deceive investors, I think it may come down to a difference in management style, language, and perhaps some bad advice from his advisors.

     

    I'm trying to keep some perspective here as well. Given everything that we have experienced over the last couple of years (legal challenges by Luddites, falling REE prices, the Malaysian Election, and last but not least, the effects of the global economy on commodity prices), I'm not fazed by this quarter's news. I was actually wondering why we did not hear more about issues and problems from the start up. That seemed very odd. So, now the facts are out. A speed bump on the road to progress?

     

    Just my opinion for what it is worth.
    2 Aug 2013, 10:36 PM Reply Like
  • jimp
    , contributor
    Comments (671) | Send Message
     
    Lynas delays further development of its Duncan deposit..

     

    http://bit.ly/13PbYLp

     

    I'm not sure whether to cry or buy more. You have to wonder if sometime in the future if the rare earth sector could sling-shot the other way to another bubble or bull run again, since we've had such
    a dramatic decline.
    4 Aug 2013, 01:09 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17252) | Send Message
     
    Jimp: IMO a good move for the moment. But reading
    omgwen3rds2's posts up top, I'm not worried about that part of it. Time will correct things and Lynas will come up to its potential.

     

    Considering the state of the world economies, even if REE prices recover as the stuff OMG post suggests, there will still be a lot of uncertainty out there for a long while.

     

    The Chinese shift that TB has explained so completely will undoubtedly make the REE prices be somewhat resistant to the effects of the general economic malaise though.

     

    Personally, I think it much more important for then to fish qualification sample acceptance, get the "sustainable" pricing issues worked out and get the LAMP working reliably to nameplate capacity. Without that last item, customers can't have confidence in reliable supply and would, ISTM, be loathe to agree to higher prices and longer-term contracts necessary for Lynas to progress and, eventually, see the Duncan again as worth developing when the time is right.

     

    HardToLove
    4 Aug 2013, 01:25 PM Reply Like
  • tripleblack
    , contributor
    Comments (13441) | Send Message
     
    Author’s reply » Delaying the Duncan project is simple common sense - and easily reversed when conditions change. It isn't going anywhere, and neither is Crown.

     

    Operationally, Lynas can simply shift where they are digging their pit (which is after all simply a large hole in the ground) into the richer segments of Duncan whenever they need that "heavier" ore. They still won't be able to fully process it and extract the heavies, but they can't do that now. On that topic, I believe this news is a strong hint that they are shopping for a tolling contract for the mixed byproduct which they are accumulating. This becomes more important than ever, now that its apparent that it will be some time before Lynas can complete this cycle themselves.

     

    One thing about REE demand is that it is rather resistant to macro-economic forces due to the products it feeds. The market for smart phones is still in a massive growth phase. Alternative energy initiatives are burgeoning, and have shown a remarkable immunity to economic conditions. New applications for rare earths continue to emerge, and the hysteria which greeted the unsustainable surge in REE prices has died down.

     

    The next boot to hit the floor, imo, will be next year's export quotas from China. I would not be surprised to see them issue "zero" quotas for some elements, along with decreasing other elements. Their own production has decreased, in some areas dramatically, while the markets were flooded with smuggled supplies squirreled away from years of clandestine operations. Those operations are history, and the likelihood of another such event are zero.

     

    Markets are already beginning to experience the first faint stirrings of hunger after a long binge...
    4 Aug 2013, 03:57 PM Reply Like
  • jimp
    , contributor
    Comments (671) | Send Message