EDITOR: | May 30th, 2016 | 8 Comments

Lynas Corporation Limited: Confirmation of Debt Facility Amendments

| May 30, 2016 | 8 Comments

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  • CD

    Don’t Tim Ainsworth and JJBeswick just love the news.

    June 3, 2016 - 5:00 AM

  • JJBeswick

    Hi CD,
    I thought the announcement was a bit redundant; simply restating the already obvious.
    However it never hurts to repeat key information relating to Lynas’s ongoing survival and likely subsequent success.
    Fact is, in the current market, all Chinese producers (possibly excepting Baotou) are losing money.
    Lynas, being currently marginal, is clearly a low cost producer.
    It’s a no-brainer that the Japanese would continue to ensure that Lynas will remain in production. (Think Chinese fishermen and RE exports to Japan.)
    It’s also VERY interesting that Lynas have recently chosen to fire up the final 25% of the LAMP’s separation capacity. Expect lower COP as fixed costs are spread thinner. I’m sure Lynas had a good look at the numbers before venturing that major (and short-term costly) move.
    When the RE market returns to “normality” Lynas will be comfortably profitable.

    June 5, 2016 - 11:54 AM

  • Alex

    I agree that strategically Japanese need to keep Lynas till the time when their own project (which they had invested their own money) will start production. But till the time that Lynas add additional quantaties at REE market the prices can not return to “normality” because 10-15 000 tones additionally consist 15% of market. And demand not grow up.

    June 5, 2016 - 12:29 PM

  • Zest

    …cannot make interest repayments let alone any principle…..if RE prices stay at these levels ….this dog will end up bankrupted

    June 6, 2016 - 3:57 AM

  • JJBeswick

    Alex seemsto me your 2 points contradict one another & are both questionable.
    – So the japanese want their own project with their own money invested? Seems pretty clear there’ll be no other ROW project for the next 5 years at least, Japanese or not. But they ARE heavily invested in Lynas’s success in return for a supply guarantee. What more would they want?
    – If the market can’t return to “normal” because of Lynas’s extra production then there’s certainly no place for a Japanese producer. As for a lack of demand growth, check the InvInt article of April 20th for a more informed view.

    Great analysis Zest!
    If prices stay where they are for another year or 2 then Lynas will be about cashflow even and struggle to repay its debts on time. So will every other producer on the planet.

    June 6, 2016 - 9:13 AM

  • JJBeswick

    Opps, wrong date above.
    March 15th: “Lynas, make or break year”

    June 6, 2016 - 9:20 AM

  • Alex

    The Japanese control 60% of REE demand of ROW
    They will decide who will alive or who will die on this market exept Chinese.
    They have their own projects at Birma,Vietnam ,Madagaskar, India
    As for Lynas – it is in their supplying chain now but they give them loan . So , they can buy it as loan garantee or if prices grow up at Lynas just buy REE from other supplyer who will suggest low prices (may be Vietnam ?)
    They also keep production at Japanese (Mitsui) around 5000 tones
    If we estimate their demand is around 15-20 000 tones per year.
    Other demand controled by Chinese and rather small demand have US 5-7 000 tones and Europe 5-7 000 tones and South Korea.
    Chinese demand will solved by Chinese supplyers.

    June 6, 2016 - 11:31 PM

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