Lynas Rare Earths Limited · ASX:LYC
Lynas Rare Earths — Lynas — Macquarie Australia Conference 2012
34 slides from Lynas Rare Earths's conference presentation, May 2, 2012
Slide 1: Rare Earths – we touch them everyday
Lynas Corporation Rare Earths – we touch them everyday For personal use only Nicholas Curtis AM Macquarie Australia Conference 2 May 2012
Slide 2: 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 Presentatio
Slide 3: Agenda
Agenda For personal use only 1. SAFETY AND SUSTAINABILITY 2. THE RARE EARTHS MARKET 3. WESTERN AUSTRALIA OPERATIONS 4. MALAYSIA OPERATIONS 5. FINANCIAL UPDATE 3
Slide 4: Lynas will offer a source of supply of Rare Earths outside of China
Lynas will offer a source of supply of Rare Earths outside of China For personal use only LYNAS VITALS AT A GLANCE VISION: Be the leader in Rare Earths for a sustainable future. EXCHANGES: ASX (code LYC), OTCQX (code LYSDY) Mount Weld INDICES: ASX 100, MSCI Australia SHARES: 1,714m on issue (1,885m
Slide 5: Safety and Sustainability
For personal use only SAFETY AND SUSTAINABILITY 5
Slide 6: Lynas is a safe and sustainable source of Rare Earths supply
Lynas is a safe and sustainable source of Rare Earths supply For personal use only STRONG SAFETY CULTURE Malaysia Operations Gas Treatment Lynas has achieved more than 8,000,000 hours Lost Time Injury (LTI) free on the LAMP construction project IAEA confirmed compliance of the LAMP design with i
Slide 7: The Rare Earths Market
For personal use only THE RARE EARTHS MARKET 7
Slide 8: Supply and Demand trends
Supply and Demand trends For personal use only Structural deficit anticipated as demand recovers while supply remains constrained 160000 Forecast 140000 120000 100000 tonnes REO 80000 60000 40000 20000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2
Slide 9: Key demand drivers and growth outlook
Key demand drivers and growth outlook For personal use only Sector Segment Sub Segments Growth rate over GDP Rare Earths used Fuel Cracking FCC La Conventional Energy Emissions control Catalysts + 2% Ce Nuclear Material Gd Storage NiMH Batteries +10-15% La, Nd Renewable Energy Wind turbines Magnets
Slide 10: Factors influencing the demand outlook
Factors influencing the demand outlook For personal use only Rare Earths demand should continue to increase at above-GDP growth rates Factors accelerating demand growth: Factors slowing down demand growth: • Environmental protection: • Constrained availability of certain Rare Earths, • Wind turbines
Slide 11: Recent developments in Rare Earths prices
Recent developments in Rare Earths prices For personal use only Prices returning to sustainable levels that support long term industry growth Both China domestic and FOB prices returning Mount Weld basket price history to levels that promote long term demand growth 250 in key applications. Recen
Slide 12: Sales & Marketing
Sales & Marketing For personal use only Key points Lynas’ philosophy is to establish a Rare Earths supply chain based on environmentally sustainable practices. Our Rare Earths Direct (RED) brand epitomises this philosophy. Lynas’ key objectives are to: Stabilise recent industry volatility and
Slide 13: Western Australia Operations
For personal use only WESTERN AUSTRALIA OPERATIONS 13
Slide 14: The mine is within the Central Lanthanide Deposit
The mine is within the Central Lanthanide Deposit (CLD), a Resource of 15.0 million tonnes at 9.8% for 1.5 million tonnes of contained REO For personal use only MOUNT WELD STOCKPILES WITH RARE EARTH OXIDE PERCENTAGES DUNCAN DEPOSIT (DD) 773,000t on stockpiles 8% 13% DD CLD 17% DEPOSIT 26% 15% 13% 21
Slide 15: The Concentration Plant commenced feed of ore in May 2011
The Concentration Plant commenced feed of ore in May 2011 For personal use only OVERHEAD VIEW OF THE CONCENTRATION PLANT 15
Slide 16: Concentration Plant continues to perform well
Concentration Plant continues to perform well – this part of the production process is now significantly de-risked For personal use only MOUNT WELD CONCENTRATION PLANT Concentration Plant March March Performance 2012 ramp- up plan Final concentrate 36.0% 36.0% grade Recovery 70.6% 67.0% Flotation ce
Slide 17: The Duncan deposit is complementary to current operations
The Duncan deposit is complementary to the current operations at the Central Lanthanide Deposit For personal use only CENTRAL LANTHANIDE DEPOSIT AND DUNCAN DEPOSIT RESOURCES Comparison of REE distribution CLD & Duncan Mineral Resource (2.5% REO cut-off) CLD Duncan REO (Secondary Monazite) (Crandalit
Slide 18: Duncan is a highly prospective deposit for HREEs
Duncan is a highly prospective deposit that could provide a new source of HREEs For personal use only Total Mount Weld resources Duncan is a shallow deposit that could be easily exploited using open cut mining Duncan is open to the east and southwest (see chart) with a high Potential extension C
Slide 19: Malaysia Operations
For personal use only MALAYSIA OPERATIONS 19
Slide 20: Current status of the LAMP
Current status of the LAMP For personal use only MAJOR MILESTONES TO DATE LAMP construction: 98% complete (end of March) Ready-for-Start-Up program (operational preparedness): >94% complete Malaysia headcount: 251 (now at 90% of total expected workforce) Pre-commissioning test packs: >85% co
Slide 21: LAMP Temporary Operating Licence
LAMP Temporary Operating Licence For personal use only Licence approved in February 2012 Appeal to the Minister of Science, Technology & Innovation was heard in April 2012. Lynas respects the regulatory approvals process in Malaysia. Lynas has intensified its community consultation and engagem
Slide 22: Schematic - Lynas Advanced Materials Plant core process
Schematic - Lynas Advanced Materials Plant core process, which uses mature industry technology For personal use only 22
Slide 23: The LAMP is 0.8km wide and 1.4 km long
The Lynas Advanced Materials Plant (LAMP) is 0.8km wide (N-S) and 1.4 km long (E-W) For personal use only OVERVIEW OF UP AND DOWNSTREAM SEPARATION AND PRODUCT FINISHING WORKSHOPS 23
Slide 24: LAMP construction is more than 98% complete
LAMP construction is more than 98% complete For personal use only Cracking (Rotary Kiln) Gas Treatment Primary Leaching Secondary Leaching 24
Slide 25: LAMP construction is more than 98% complete
LAMP construction is more than 98% complete For personal use only Upstream Extraction Downstream Extraction Post Treatment Tunnel Furnaces 25
Slide 26: The path to operating cash flow
The path to operating cash flow For personal use only Key steps to first cash flow Commissioning Commence First cash Construction First Customer Commercial & first feed to plant ramp- flow from completion kiln production qualification shipments up sales Current operational focus is construction co
Slide 27: The products are set for Phase 1; flexibility in Phase 2
The products are set for Phase 1; Lynas has product flexibility in Phase 2 For personal use only ANTICIPATED PHASE 1 ─ 11,000t REO PRODUCTS VOLUMES (tpa) Ce carbonate 2,600 La carbonate 1,350 Ce / La carbonate 4,000 Nd / Pr oxide 2,700 SEG + Heavy Rare Earths 480 PHASE 2 ─ ADDITIONAL 11,000t REO PRO
Slide 28: Strategic Alliance with Sojitz
The Strategic Alliance with Sojitz shall provide a stable and long term source of supply for the Japanese market For personal use only LYNAS, SOJITZ AND JOGMEC HAVE EXECUTED DEFINITIVE AGREEMENTS Sojitz – Lynas Strategic Alliance Financing Availability Distribution & Agency Agreement Agreement Agree
Slide 29: Letter of Intent signed with Siemens for magnet JV
Letter of Intent signed with Siemens to establish a JV company for the sustainable production of neodymium-based Rare Earths magnets For personal use only LYNAS AND SIEMENS INTEND TO FORM A JOINT VENTURE FOR MAGNET PRODUCTION LYNAS SIEMENS Magnet technology and Long term supply manufacturing capabil
Slide 30: Financial Update
For personal use only FINANCIAL UPDATE 30
Slide 31: Summary of Phase construction costs
Summary of Phase 1 construction costs For personal use only PHASE 1 ESTIMATED CONSTRUCTION AND OTHER TOTAL SPEND TO 31/3/12 FUTURE SPEND CAPITAL COSTS A$m A$m A$m Mount Weld Concentration Plant 75.4 75.4 0.0 Lynas Advanced Materials Plant, Malaysia 349.1 288.4 60.7 Engineering and Project Management
Slide 32: US$225m Convertible Bond issue to Mount Kellett
US$225m Convertible Bond issue to Mount Kellett was completed in February 2012 For personal use only In January 2012, Lynas executed binding documentation with Mount Kellett Sources of funds Estimated uses of funds • US$50m Tranche 1 • ~$172m for working capital (includes • US$175m Tranche 2 retirin
Slide 33: Lynas – online in 2012, delivering Rare Earths globally
Lynas – online in 2012, delivering Rare Earths globally For personal use only • Our vision is to be the leader in Rare Earths for a sustainable future. • We are close to realising this vision. • Our supply of Rare Earths will be based on environmentally sustainable practices. • Lynas will be online
Slide 34: Note
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