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  • Molycorp Phoenix Drawings to Photos Progress 13 comments
    Nov 1, 2011 10:48 PM

    Recently, Michael Gambardella and analysts at JP Morgan cut estimates on Molycorp due to the large supply of Cerium (Ce) and Lanthanum (La) expected to enter the market in 2012 from Lynas and Molycorp. The expectation is this could create oversupply and drop the prices of these two products. I disagree with this position. Firstly, I do not believe Molycorp's Project Phoenix will produce a single ton of rare earth in 2012. And second the Lynas Corporation (Lynas) is far in front of any other rest of world rare earth project and will enjoy attractive prices into the future. Lynas will be the most advance rare earth project in the world by Q2 2012. The Lynas Advanced Materials Project (LAMP) has moved to the public disclosure stage in it's Malaysian approval process. This public disclosure is more of a governmental notice procedure and indicates the debate over LAMP is winding down. The advancement suggests Lynas is in a clear frontier position outside of China in this market and is far ahead of others.

    To understand this conclusion an understanding of these Rare Earth Processing Plants is required. The Lynas Concentration Plant is fully buil and producing with above expectation recovery rates. The Lynas Advanced Materials Plant is nearly fully built (over 85% complete in November 2011) and is expected to have first feed in Q1 2012.

    Molycorp's Project Phoenix is "On time and on budget" according to Molycorp's CEO Mark Smith. Based on the information on their web site I disagree. The photos below are currently or were on the http://www.molycorp.com site unless linked from elsewhere.



    The old drawings are in this analyst day presentation at:

    http://bit.ly/tuFhYH


    http://www.epa.gov/chp/documents/meeting_100511_coleman.pdf
    (Slide 10)



    http://www.epa.gov/chp/documents/meeting_100511_coleman.pdf
    (Slide 9)



    36 Acre Separations, CHP, Salt Recovery, Ancillary Facilities

    Above Google Earth Image shows 36 Acre Separations, CHP, Salt Recovery, Ancillary Facilities in 2009 (Pre-Project Phoenix)

    Above 36 Acre Separations, CHP, Salt Recovery, Ancillary Facilities (in background April, 2011, old plant in foreground)



    Above September 2011 Separations, CHP, Salt Recovery, Ancillary Facilities

    Below-Slide 19 appears to show a close up of what Moly now labels as the Site of the New State-of-the-Art Separations Facility in Slide 26 of this presentation:

    http://slidesha.re/uQr0Em

    Above note the forrest green building with four "smoke stakes" and the current CHP has only two. Also note the large number of color buildings in the drawings not even started in the construction.

    Below is a more recent drawing of the Separations, CHP, Salt Recovery, Ancillary Facilities. Here the pink building shows four black "smoke stakes" and the current CHP has only two. Also note the large number of color buildings in the drawings not even started in the construction.


    Below September 2011 photo of CHP

    Above and below September 2011

    So either there has been massive redesigns from the analyts day drawings or there are a large number of foundations yet to begin. Either scenario seems very bad to me. And if Moly is going piece meal I see multiple bottlenecks and confusion in the future. Overall, this project seems very different than the promises Molycorp is making.

    Below is the December photos of the Separations, CHP, and Salt Recovery.

    December 2011 Above is the full 36 acre Separations Pad Site. The CHP is built with no gas line available, while other fondations are just beginning. And based on the drawing of the Serparation Site several buildings have only grading work one year into the project.

    December 2011 Below to the right is the CHP but the rest of the color drawn buildings in the slide above are just starting.

    December 2011 Below one full year into the Phoenix Project and this foundation has not received concrete.

    December 2011 (Below) On the other side of the CHP the iron in the foundations is not yet placed.



    Mill Area


    Above Google Earth Image shows Mill Area Construction in 2009 (Pre-Project Phoenix)

    Above and Below September 2011 Mill Area

    (Note the worker in the photo for scale. This foundation is about the size of a suburban house. I assume the structure is an internal piece of a bigger structure.)

    Below December 2011 Mill Area the prior concrete structure is encased in framing (left)and the Shell of the Ball Mill building is built (behind). The Ball mill is in the shelled building.



    Below is the reverse of the construction site.

    December 2011 Below Here again the work is mostly at a foundation stage:


    And even the more advanced large building is only at a framing stage:

    Crusher

    Google Earth Image shows Crushing Facility in 2009 (Pre-Project Phoenix)

    Above September 2011 Crushing Facility

    Below December 2011 Crushing Facility



    Paste Tailings Plant

    Google Earth Image shows Paste Tailings Plant in 2009 (Pre-Project Phoenix)


    September 2011 Above and Below Paste Tailings Plant


    Below December 2011 is the first structure on the large Paste Tailings Plant Site:

    But this structure is only a small part of the Paste Tailings Plant Site.
    Below December 2011 The full Paste Tailigs Site:




    And the road ahead looks even longer when the enitire Paste Tailings Site and Crusher Site are viewed together.
    Above and Below December 2011 Paste Tailings Plant Site With Crusher Site:


    I know the compare is challenging. But there is something here for certain. I appreciate if others can see my point.
    Perhaps the LAMP build offers a compare. The LAMP is almost fully built but below is a slide from February 2011:




     

    It will be interesting to see how this progresses but I have my doubts. Moly has spent most of their construction to date on the CHP with it's two gas turbines. I find this odd since Kern River is saying the lateral gas line to Mountain Pass is not anticipated till summer 2012.

    Themes: molycorp mcp
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Comments (13)
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  • FocalPoint Analytics
    , contributor
    Comments (5803) | Send Message
     
    Very nice Chi!

     

    I see multiple buildings in the pictures. Are you saying that work has stopped on everything except the CHP (Combined Heat and Power) unit?
    2 Nov 2011, 09:11 AM Reply Like
  • chihawk
    , contributor
    Comments (2099) | Send Message
     
    Author’s reply » I don't think worked stopped. My issue is the build seems disorganized with too much engineering on the fly. Either they are prioritizing based on funding with Silmet instead of the government loan or Simutomo or they are rushing the most important or most certain pieces first to move the project along. But in any case, when you do a large project it should have an orderly build. The sooner you can see the design on the ground corresponding to the plans the better is my experience. We are over ten months through this project with a target date (for markets) just six months away and it's mostly dirt. Grading can take a while but that seems way behind schedule to me.
    And even if the building pop up quickly (a very unlikely result with industrial/mining construction) the perceived disorder suggests bottlenecks and inefficiencies. To reach anything near their eventual 40k tpa they need efficiency that I can't see right now.
    2 Nov 2011, 09:34 AM Reply Like
  • toly
    , contributor
    Comments (191) | Send Message
     
    Nice work. Today's (Friday) CNBC report showed camera panning shots of the Mountain Pass location. The camera showed some foundations under construction and some other older equipment that appeared to be in the process of incorporation into other new equipment.

     

    The planning, engineering and construction is a long complex process that involves significant piping "circuits" and industrial control systems. These control systems use valves, metering, and feedback systems that not only need to be installed but requiring industrial computer programming with operational and safety functions. Once this is finished and statically tested, the commissioning process needs to take place.

     

    In short, your pictures and other pictures I have seen do not indicate a good deal of progress in this area. I think a 40kmtpa process will take significant resources and in my experience with industrial projects, engineering and construction errors increase exponentially with time constraints and pressure on the project completion.

     

    After reading the Moly blog touting the advantages of project acceleration, it is pretty apparent that Moly has not suffered through all of the implications building and commissioning (and capitalizing) of a project of this caliber...
    4 Nov 2011, 11:31 PM Reply Like
  • chihawk
    , contributor
    Comments (2099) | Send Message
     
    Author’s reply » toly: The camera showed some foundations under construction and some other older equipment that appeared to be in the process of incorporation into other new equipment.

     

    I watched the video again to determine it's update value. It seems the camera showed only old equipment and the late September photos above and at Moly's website are the most recent update I have. I don't see how this construction will be done in April as they are planning. I guess we'll watch insider transactions verses construction updates till then.

     

    In fairness to Moly they are saying commissioning procedures will go on after the equipment is built. I think they might put some of the actions you mention in the commissioning phase. But along the line of your point these guys are making complex industrial construction sound like it can pop up like residential housing during the boom. I don't find that realistic at all.
    5 Nov 2011, 10:20 AM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5803) | Send Message
     
    Chi, is it possible to put pictures of the same area into chronological order, for example left to right. That's the way pictures are organized in photo intelligence presentations.
    5 Nov 2011, 10:30 AM Reply Like
  • chihawk
    , contributor
    Comments (2099) | Send Message
     
    Author’s reply » FPA,
    The drawings are from a prior presentation and the overhead and foundation photos are all from 9-28-2011 according to the Molycorp website.I matched the drawings and overviews to show how they correspond. I added an old drawing from April this morning. I went right to left instead of left to right to keep the drawings closer together.
    When Moly updates their site I think they will add or delete based on what looks better to them. I plan to add in additional photos to show the real progress.
    5 Nov 2011, 11:47 AM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5803) | Send Message
     
    I don't see the side by side new posting Chi?

     

    By the way, I think preserving the older pictures is a really excellent check on their real progress.
    5 Nov 2011, 12:06 PM Reply Like
  • chihawk
    , contributor
    Comments (2099) | Send Message
     
    Author’s reply » That may be a refresh issue FPA. The added pic has the CHP site in the background with three grader trucks looking like they are in a race. In the foreground of the old plant are the white Molybags.

     

    I am also pulling old Google earth photos to match up the blog in the future (none of that is posted yet).
    5 Nov 2011, 01:03 PM Reply Like
  • youngvictor
    , contributor
    Comments (3) | Send Message
     
    Thanks Chi, great post, ni9ce to now about MCP
    TraderV
    7 Nov 2011, 01:02 AM Reply Like
  • youngvictor
    , contributor
    Comments (3) | Send Message
     
    Great stuff Chi, thanks, looking good. cheers. Victor
    7 Nov 2011, 01:03 AM Reply Like
  • seenow1
    , contributor
    Comments (2) | Send Message
     
    good stuff chihawk all is good for lyc and i think molycorp eventually
    7 Nov 2011, 07:48 AM Reply Like
  • seenow1
    , contributor
    Comments (2) | Send Message
     
    Lots of good work here Chihawk . All good for lyc and for moly down the track . i do agree there will be room for now others in this market .Lyc once profitable will sure up its hree s .It will have years of building good relations with its customers and become a reliable deliverer of re light and heavy
    7 Nov 2011, 07:50 AM Reply Like
  • chihawk
    , contributor
    Comments (2099) | Send Message
     
    Author’s reply » A quick update based on Moly's Conference Call photo update. My guess about the CHP being the only building so far on the first foundation is correct from what I can tell. Also, the mill will be built around the internal structure the workers are next to. It is built on the footings surrounding the structure. To add photos I need some similar fly overs so I'll watch the Moly website for those and then add them in.
    10 Nov 2011, 06:12 PM Reply Like
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