Lynas Rare Earths Limited · ASX:LYC
Lynas Rare Earths — Lynas — Investor Presentation (January 2010)
37 slides from Lynas Rare Earths's investor presentation, Jan 21, 2010
Slide 1: Investor Presentation
Investor Presentation For personal use only January 2010 Lynas Corporation Limited ACN: 009 066 648
Slide 2: Disclaimer
Disclaimer For personal use only ► The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about and observe
Slide 3: Lynas has a clear vision to become a global company in the Rare Earths industry
Lynas has a clear vision to become a global company in the Rare Earths industry For personal use only Vision Be a global leader in Rare Earths for a sustainable future Values Excellence in safety, health and the environment Learn from our differences and be open to change Operate in an honest,
Slide 4: Rare Earths are a unique group of elements
Rare Earths are a unique group of elements For personal use only A group of metallic elements With unique properties Lanthanum (La) Chemical Cerium (Ce) Catalytic Praseodymium (Pr) Electrical Neodymium (Nd) Magnetic Samarium (Sm) Metallurgic Europium (Eu) Optical Terbium (T
Slide 5: Rare Earths underpin new materials technology
Rare Earths underpin new materials technology required to sustain the needs of today’s society For personal use only Energy Efficiency Environmental Protection Smaller yet more powerful through lower consumption through lower emissions digital technology Compact fluorescent lights Wind turbine
Slide 6: Rare Earths improve fuel consumption and emission control in the automotive industry
Rare Earths improve fuel consumption and emission control in the automotive industry For personal use only Weight reduction through new magnets Electric motor with Neo magnets is half the weight of traditional ferrite motor Electric seats, windows and mirrors Sunroof and tail gate Windscreen
Slide 7: Hybrid technology is totally dependent upon Rare Earths
Hybrid technology is totally dependent upon Rare Earths For personal use only HYBRID electric motor and generator HYBRID NiMH battery Neodymium Lanthanum Praseodymium Neodymium Dysprosium Cerium Terbium Enabling better emission standards and lower energy consumption -7-
Slide 8: Rare Earths play a pivotal role in automotive catalytic converters and clean diesel
Rare Earths play a pivotal role in automotive catalytic converters and clean diesel For personal use only AUTOCATS IN EVERY CAR CLEAN DIESEL TECHNOLOGY Autocats convert harmful gases to inert Rare Earths compound added to diesel gases fuel in the car Rare Earths enable Diesel soot trapped in f
Slide 9: Rare Earths are vital for further important energy efficiency applications
Rare Earths are vital for further important energy efficiency applications For personal use only Energy efficient light bulb – Lanthanum is used to increase oil legislation driving demand refinery yields by 7% (FCC) Europium, Terbium and Yttrium 7% is equivalent to the demand predicted to double US
Slide 10: The consumer electronics industry use Rare Earths in many applications
The consumer electronics industry use Rare Earths in many applications For personal use only HIGH POWER NEO MAGNETS PHOSPHORS Disk drives RED GREEN BLUE Computers Data storage TV and computer screens Ipods CRT Video recorders Plasma Gaming consoles LCD Video cameras Speakers POL
Slide 11: Global sources of Rare Earths supply
Global sources of Rare Earths supply For personal use only ► China supplies 95% of world market Operates at its capacity limit ► No significant non-Chinese supply sources available today Small and limited production in Russia (3-4,000tpa) Beach sand processed by Indian Rare Earths, subsidiary
Slide 12: The sustainability of Rare Earths supply is becoming more fragile
The sustainability of Rare Earths supply is becoming more fragile For personal use only Chinese Government Policy Chinese Production Limits Strategic value of REO well understood Largest REO mine Baotou (50% of world supply) operating at capacity Mining quota of 77,500t (2% vs 2006) REO is a
Slide 13: Environmental impact of Rare Earths mining in China in the world media
The environmental impact of Rare Earths mining in China has increasingly been in the world media For personal use only Baotou Mine Southern Clay -13-
Slide 14: As supply tightened in '08 prices increased, in '09 demand dipped, prices recovering
As supply tightened in ‘08 prices increased, in ‘09 demand dipped, prices are now recovering For personal use only Supply, Demand and Price Development REO US$/kg Metric Tonnes Based on Mt Weld Composition, FOB China basis 15.00 175000 14.00 US$12.35/kg 13.00 18 Jan 10 150000 Rare Earths Price Chart
Slide 15: Lynas Mt Weld will be the 1st fully integrated new source of supply outside of China
Lynas Mt Weld will be the 1st fully integrated new source of supply outside of China For personal use only Mount Weld, Western Australia World’s richest Rare Earths resource Open pit mine complete Concentration Plant – Mount Weld, WA Phase 1: 33,000 tpa 40% REO concentrate Phase 2: 66,000 tp
Slide 16: Location of Mount Weld
Location of Mount Weld For personal use only 30km from Laverton Airport, Post Office, Hotel, School, etc -16-
Slide 17: Basic Geology of Mount Weld
Basic Geology of Mount Weld For personal use only Carbonatite pipe (2 billion year old volcano) Surface weathered down by 1,800m creating a supergene concentration near the surface -17-
Slide 18: The current mining operation is within the Central Zone Pit
The current mining operation is within the Central Zone Pit For personal use only Central Lanthanide Deposit Sector The Total CLD Sector Mineral Resource Mt Weld Tenements (2.5% REO cut-off) Category Tonnes Grade Tonnes (Mt) (%REO) (kt) REO Measured 2.21 14.7 324 Indicated 5.26 10.7 563 Inferred 4.7
Slide 19: Mt Weld's Central Zone Pit has a natural advantage in grade and composition
Mt Weld’s Central Zone Pit has a natural advantage in grade and composition For personal use only Mt Weld US$/kg Baotou Composition Rare Earth Elements Composition Jan 2010 By Weight By Weight Lanthanum Oxide 25.50% 5.80 25.70% Cerium Oxide 46.74% 4.20 51.30% Praseodymium Oxide 5.32% 25.80 5.40% Neo
Slide 20: Mount Weld mine site showing ore type and REO grade of stockpiles
Mount Weld mine site showing ore type and REO grade of stockpiles For personal use only Southern Zone Offices Overburden Li Stockpiles 8% Li 13% Li Cz 17% 26% Cz 15% Cz 13% Cz 21% Cz 20% Conc. Top soil Plant 1.5km -20-
Slide 21: Mt Weld initial mining campaign complete, loss time injury free and on budget
Mt Weld Rare Earths initial mining campaign complete, loss time injury free and on budget For personal use only Current pit floor is 51 meters below surface Ultimate pit floor is another 36 meters -21-
Slide 22: 773,000 tonnes stockpiled on site, segregated by grade
773,000 tonnes stockpiled on site, segregated by grade. The ore is soft and friable For personal use only -22-
Slide 23: Engineering design and all approvals complete for the Concentration Plant
Engineering design and all approvals complete for the Concentration Plant at Mt Weld For personal use only ► Engineering Design complete ► All Approvals in place ► All major equipment procured and stored in Australia Mount Weld Concentration Plant site – Ball Mill foundations -23-
Slide 24: Construction contracts re-initiated for the Concentration Plant
Construction contracts re-initiated for the Concentration Plant For personal use only ► Contract Status on-site Bulk earth works Downer EDI Complete Construction contract Abesque Engineering Re-initiated Steam generation RCR Energy Systems Complete Power station Kalgoorlie Power Systems Re-i
Slide 25: Substantial civil works completed including water treatment ponds
Substantial civil works completed including water treatment ponds For personal use only Process water treatment pond complete Mount Weld bore water Run off water treatment pond complete -25-
Slide 26: Containers of Rare Earths concentrate will be trucked to Fremantle
Containers of Rare Earths concentrate will be trucked to Fremantle for shipping to Malaysia For personal use only GEBENG GEBENG GEBENG GEBENG Mount Weld to Fremantle = 1,000km -26-
Slide 27: Lynas has commenced construction of the processing plant in Gebeng
Lynas has commenced construction of the processing plant in the Gebeng Industrial Area For personal use only Satellite Photo of Gebeng Industrial Area ► Strong Federal, State, and Local Government support Lynas granted “strategic pioneer status” with 12 year tax free period Gebeng Industrial Area
Slide 28: Malaysia site construction: Piling for post treatment workshop
LYNAS ADVANCED Malaysia site construction: Piling for post MATERIALS treatmentPLANT workshop For personal use only -28-
Slide 29: Malaysia Advanced Material Plant Status
Malaysia site Malaysian construction: Advanced MaterialPiling Plantfor post Status treatment workshop ► Engineering Design to be completed For personal use only United Group engaged as the Engineering Contractor ► All Approvals in place ► Contract Status on-site Bulk earth works Substantially co
Slide 30: Construction activity in Malaysia
Construction activity in Malaysia For personal use only Building construction has commenced Lynas-constructed stormwater detention pond -30-
Slide 31: Six customer agreements have been signed
Six customer agreements have been signed For personal use only Rhodia Supply Contract 6th Customer Agreement – Supply • >US$200M¹ Contract • Long term 10 year contract • Long term multiple year contract • Cerium, Europium, Terbium & • Product from Phase I & Phase II of Lanthanum final separation and
Slide 32: Operational expenses are dominated by reagent and energy costs
Operational expenses are dominated by reagent and energy costs For personal use only Cash Cost per tonne of finished REO by expense type and region 70% 66% 60% Current Budget assumes cash 20% costs of USD 5.65 per kilo ± 10% 50% 2/3 of the costs are generated in 40% Malaysia 30% Reagents accou
Slide 33: Summary of estimated capital and operating costs to fund Phase 1
Summary of estimated capital and operating costs to fund Phase 1 of the Rare Earths Project For personal use only Construction & Other Capital Costs Total A$mm Capex spent to Future capex date A$mm A$mm WA Concentration Plant $59.5 $13.6 $45.9 Gebeng Cracker & Separator Plant 233.5 40.9 192.6 Engine
Slide 34: Lynas – building a stable supply chain for vital raw materials
Lynas – building a stable supply chain for vital raw materials to a sustainable world For personal use only Applications Raw Material Supply Lynas The growth drivers are : China dominates the Funds raised for the 1. More efficient use of market with 95% supply completion of Phase 1, energy 11,0
Slide 35: The Crown Polymetallic Deposit is a world class niobium asset
The Crown Polymetallic Deposit is a world class niobium asset and contains 475,000t REO For personal use only Crown Polymetallic Deposit Total Crown Polymetallic Mt Weld Tenements Mineral Resource Crown Polymetallic Category Indicated Inferred Total Resource Mt 1.5 36.2 37.7 Ta2O5 0.037% 0.024% 0.02
Slide 36: Lynas has acquired CSBP's rights within Mt Weld tenements
Lynas has acquired CSBP’s rights within Mt Weld tenements For personal use only Swan Phosphate Deposit at Mt Weld Lynas acquired apatite rights at Mt Weld previously owned by CSBP Limited (a subsidiary of Wesfarmers Ltd) Lynas already owns all other mineral rights within the Mt Weld tenements
Slide 37: Note: Competent Person statement
NOTE For personal use only The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Brendan Shand, who is a member of The Australasian Institute of Mining and Metallurgy. Brendan Shand is an employee of Lynas Corporatio