Slide 1: Introduction to Lynas Presentation
23 March 2017 For personal use only INTRODUCTION TO LYNAS PRESENTATION As noted in the Company’s announcements dated 24 January 2017 and 28 February 2017, Lynas Corporation (ASX:LYC, OTC:LYSDY) is now producing NdPr at design rates. For the information of all stakeholders, we have prepared the attac
Slide 2: Introduction to Lynas Corporation
Introduction to Lynas Corporation For personal use only March 2017
Slide 3: Disclaimer
Disclaimer For personal use only This Presentation has been prepared by Lynas Corporation Limited (ABN 27 009 066 648) (Lynas or the Company) This Presentation contains summary information about Lynas and its subsidiaries (Lynas Group) and their activities current as at the date of this Presentation
Slide 4: Topics Covered
Topics Covered For personal use only • Introduction to Lynas • Safety, Environment and Community • Operations: ₋ Malaysia ₋ Western Australia • Sales & Marketing • Recent Financial Performance 3 3
Slide 5: LYC Share Price Since Sept 2014
LYC Share Price Since Sept 2014 For personal use only September 2014 – March 2017 4
Slide 6: Introduction to Lynas
Introduction to Lynas For personal use only • Lynas mines and processes Rare Earth elements – Lynas mines Rare Earths and completes first stage processing at Mt Weld Western Australia – Concentrate is shipped to Malaysia where it is refined by separating the various RE elements – Sales are primarily
Slide 7: What are Rare Earths?
What are Rare Earths? For personal use only Rare Earths are a moderately abundant group of 15 metallic elements known as the Lanthanide series (atomic numbers 57 through to 71) plus Yttrium (39). Although Scandium (atomic number 21) is not a Rare Earth element, it is commonly included because of its
Slide 8: How are Rare Earths used?
How are Rare Earths used? For personal use only No RE NdPr Y, Eu, Tb Ce YEu MREO Y, Eu, Tb No RE NdPr, Dy Nd No RE 7 7
Slide 9: Rare Earths: Improved Environmental Outcomes
Rare Earths: Improved Environmental Outcomes For personal use only Where RE Property Allows Final Impact Wind Permanent magnet No gear box (Cost) Energy produced at turbines generators Better yield in light winds lower cost Cars Permanent magnets Electricity savings motors Weight Reduction Saves ene
Slide 10: Lynas' products are used in a broad range of applications
Lynas’ products are used in a broad range of applications For personal use only Breakdown of product mix and their main uses FCC Lanthanum carbonate 12% La-Ce Polishing powder carbonate SEG / HRE 36% carbonate 5% lighting. Energy saving Nd / Pr oxide 24% catalysts motors, batteries Magnets, electric
Slide 11: Safety
Safety For personal use only • Lynas has implemented extensive processes to ensure that production is safe for employees, safe for the environment and community and secure for our customers • Lynas has a good safety record which we seek to continue to improve – Lost time injury frequency rate (“LTIF
Slide 12: Water Management at Mt Weld
Water Management at Mt Weld For personal use only The Concentration Plant at Mt Weld requires high quality water which is produced from water extracted from the aquifer which exists across within the carbonatite pipe and across the rare earth ore zone. The groundwater is processed via Reverse Osmosi
Slide 13: Environmental assurance in all stages of operations in Malaysia
Lynas has designed environmental assurance in all stages of its operations in Malaysia For personal use only Environmental Potential Environmental Lynas Industry Leading Environmental Issue Impact of RE Processing Solution RE processing plants can release 5 stage gas scrubbing facility to minimi
Slide 14: Lynas is a safe, positive and committed contributor to its local communities
Lynas is a safe, positive and committed contributor to its local communities For personal use only Malaysia - Lynas has designed environmental assurance in all stages of its operations - Lynas operations are measured independently: - Four years of data show no increase in background radiation levels
Slide 15: The Mount Weld Carbonatite Intrusion
The Mount Weld Carbonatite Intrusion World Class REE and Rare Metals Deposit For personal use only Central Lanthanide Deposit Crown Deposit Mt Weld Mining Leases • Central Lanthanide Deposit, the highest grade operating Rare Earths Coors Deposit mine in the world with a current operating LOM JORC re
Slide 16: Resources and Reserves
Resources and Reserves For personal use only Mt Weld contains one of the world’s largest and highest grade Rare Earth deposits - The Ore Reserves are sufficient to sustain economic total production of 22k tpa REO for over 25 years - The tenements include undeveloped Heavy Rare Earths, Niobium and Ph
Slide 17: Concentration Process
Concentration Process For personal use only 16
Slide 18: The concentrate is shipped from Fremantle WA to the LAMP
The concentrate is shipped from Fremantle WA to the LAMP, in Kuantan, Malaysia For personal use only 17
Slide 19: Step 1: Cracking & Leaching
Step 1: Cracking & Leaching RE Fe Phosphate + H2SO4 High temperature RE Sulfate solution For personal use only 2 state of the art waste gas treatment units 4 rotary kilns where the reaction occurs 18
Slide 20: Step 2: Solvent Extraction (SX)
Step 2: Solvent Extraction (SX) Separate RE Sulphate into individual elements For personal use only Leaching Solvent pipe Adjustable pipe RE Sulphate Heavy RE Chloride Agitator SX 1 Sightglass 241 – MgO Neutralization Internal recycling Organic phase outlet SX 3 De-Fe RE Chloride SX 2 Organic & aque
Slide 21: Step 3: Product Finishing
Step 3: Product Finishing Convert RE Chloride into carbonate/oxide Pack and Ship For personal use only LP Steam Na2CO3 Solution Hot water Hot water RE Cl3 Pre-treatment Filtration Precipitation Centrifuges RE Carb. Filtrate Reagents Cake Waste Water (HDS) Calcination RE Oxide 20
Slide 22: The Global Rare Earths Market
The Global Rare Earths Market For personal use only • Rare Earths are essential inputs to many important future facing technologies: -To reduce car gas emissions -In electrical and hybrid cars, and renewable energies such as wind turbines • China dominates rare earths production and is vertically in
Slide 23: The Rare Earth Market is growing especially in magnets
The Rare Earth Market is growing especially in magnets For personal use only Estimated Rare Earth Demand per Market Segment • 1/3 Processed in CHINA for CHINA • 1/3 Processed in CHINA for ROW: ROW Industry Challenge • 1/3 Processed in 22 ROW for ROW
Slide 24: RE Magnets are the best choice for small/medium motors
RE Magnets are the best choice for small/medium motors For personal use only Smaller size/weight Asynchronous Wired ABS pump Ferrite NdFeB 1400gr 700gr Electrical Power efficiency • NdFeB benefits fully leveraged with e-cars • Weight reduction = Reduced consumption (std cars) • Better efficiency = s
Slide 25: RE magnets improve performance and reliability of Wind Turbines
RE magnets improve performance and reliability of Wind Turbines For personal use only Better Direct Drive Wired Direct Drive PM Reliability No RE 0.6-1.2 ton/MW Gear Box Wired Gear Box PM No RE 200kg/MW 700gr Electrical Power efficiency • Reliability: Reality and Perception • Direct Drive is efficie
Slide 26: Lynas can differentiate as a supplier
Lynas can differentiate as a supplier For personal use only • Quality and environmental assurance from mine to customer is important in key growth segments (Automotive, Wind turbines) – Lynas offers assurance and traceability of all product • RE products can be differentiated based on quality and pe
Slide 27: In the 1st months of FY17, Lynas posted new records on all key measures
In the 1st 6 months of FY17, Lynas posted new records on all key measures For personal use only July-Dec 16 July-Dec 15 % Change Production - Finished Product (RTS) 7,579 t 6,337 t ↑ 20% - NdPr (RTS) 2,506 t 1,905 t ↑ 32% Sales Volume - Total 6,431 t 5,773 t ↑ 11% - NdPr 2,473 t 1,923 t ↑ 29% Sales
Slide 28: Product Finishing Ramp Up
Product Finishing Ramp Up NdPr at design rate for Oct-Dec Quarter For personal use only Product Finishing Output REOt 4,500 3,883 4,000 3,745 3,641 3,500 3,184 3,056 3,000 2,660 2,546 2,500 2,212 1,802 1,897 2,000 1,500 1,000 500 407 549 445 885 967 949 846 1,150 1,180 1,335 0 Q1 FY15 Q2 FY15 Q3 FY1
Slide 29: Sales Volume Trend
Sales Volume Trend NdPr in line with production For personal use only 28
Slide 30: Sales Revenue
For personal use only Sales Revenue 29
Slide 31: Operating Costs (Prod. costs + Overheads)
Operating Costs (Prod. costs + Overheads) NdPr increased > 200%, operating cost increased 20% For personal use only 30
Slide 32: Unit Operating Costs Trend
Unit Operating Costs Trend For personal use only 31
Slide 33: Cash Flow
Cash Flow excluding AELB deposit payment For personal use only a. Lower sales revenue; b. Payment of annual insurance premium; c. Capital expenditure on TSF2 at WA ** **Investing Cash Flow is CAPEX 32
Slide 34: The recent debt restructure improved the terms of Lynas' debt facilities
The recent debt restructure improved the terms of Lynas’ debt facilities For personal use only • Extension to debt maturity dates – JARE (US$200 million) 30-6-2020 – Convertible Bond (US$225 million) 30-9-2020 • The JARE interest rate reduced to 2.5% per annum. The convertible bond interest rate red
Slide 35: Lynas' Position
Lynas’ Position For personal use only • Now a credible, reliable non-Chinese source of Rare Earths from mine to customer • Recognised environmental credentials – Environmentally assured and traceable supply source – from mine to customer • Strong commercial relationships with customers in Japan: - J
Slide 36: Competent Person's Statement
Competent Person’s Statement For personal use only COMPETENT PERSON’S STATEMENTS– MINERAL RESOURCES The Mineral Resources and Ore Reserves Statement in this Presentation is based on, and fairly represents, information compiled by Mr. Brendan Shand who is a consultant geologist to Lynas Corporation.
Slide 37: Rare Earths Market Data: Disclaimer
Rare Earths Market Data: Disclaimer For personal use only The slides in this presentation containing Rare Earths market data have been sourced from independent analysis of end application demand, along with Lynas estimates of quantities of Rare Earths end use in various key applications. Althoug