Slide 1: Rare Earths Investor Presentation May 2011
Rare Earths For personal use only WE TOUCH THEM EVERYDAY Investor Presentation May 2011
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: Rare Earths cannot be substituted in many applications
Rare Earths cannot be substituted in many applications For personal use only RARE EARTHS EARTHS: LANTHINIDES PLUS YITTRIUM – UNIQUE PROPERTIES • Chemical Unique electron configuration • Catalytic Oxygen storage and release • Magnetic g High magnetic anisotropy and large magnetic moment • Optic
Slide 4: Rare Earths underpin new materials technology required to sustain today's society
Rare Earths underpin new materials technology required to sustain the needs of today’s society For personal use only Energy efficiency through Environmental protection Smaller yet more powerful lower consumption through lower emissions digital technology • Compact Fluorescent Lights • Wind turbine •
Slide 5: Supply shortfall and increasing prices result of structural change in China
Supply shortfall and increasing prices are a result of structural change as China addresses For personal use only environmental and mining issues HISTORIC AND FORECAST SUPPLY, SUPPLY DEMAND AND PRICING t REO US$/kg 200000 US$168.30/kg 165.00 23 May 2011 180000 150.00 160000 135.00 120.00 140000 105
Slide 6: Magnets will be the growth driver for Rare Earths demand to 2014
Magnets will be the growth driver for Rare Earths demand to 2014. Polishing powder demand has For personal use only dropped due to activities to improve productivity DEMAND FORECAST BY APPLICATION 2010 Demand by Application 2014 Demand Forecast by Application A li i Application Demand D d (%) Demand
Slide 7: The market outside of China is growing strongly
The market outside of China is growing strongly. Japan with an auto and high-tech high tech manufacturing For personal use only industry is the largest non-China market DEMAND FORECAST, NON-CHINA REGIONS USA Demand Europe Japan & SE Asia • Japan with an automotive and high-tech 100,000 manufacturing
Slide 8: China is a strong growth market, driven by clean-tech and high-tech
China is a strong growth market, driven by clean- tech h and d hi high-tech h h iindustry d within i hi Chi China For personal use only CHINA DEMAND 1990 to 2009 CHINA FORECAST DEMAND 2010 - 2015 (t REO) (t REO) 120,000 100,000 80,000 60,000 40,000 20,000 ‐ 2010 2011 2012 2013 2014 2015 Source: CSRE
Slide 9: China's maximum production will be 100kt REO after restructuring
China’s maximum production p.a. will be 100kt REO after the industry is restructured – and as For personal use only such China will move to a net importer in 2014/15 CSRE PRODUCTION FORECAST FOR CHINESE RARE EARTHS INDUSTRY Source: CSRE, Critical Metals Investment Summit, Vancouver, Canada Jan 21, 2
Slide 10: China aims to improve return on resources and stimulate rest of world supply
China aims to improve “return on resources” as wellll as stimulate ti l t R Restt off W World ld supply l For personal use only CHINESE POLICY FOR THE RARE EARTHS INDUSTRY Production Quota (Tonnes REO contained within concentrate) 100000 • 1H 2011 Export Quota 14,446t 80000 Ionic Clays 60000 40000 S
Slide 11: In 2010 Rare Earths supply was outstripped by demand
In 2010 Rare Earths supply (115kt REO), was outstripped t ti d by b ddemandd (128kt REO) For personal use only CHINESE SUPPLY SOURCES NON CHINESE SUPPLY SOURCES (2010 CAPACITY, REO) (2010 CAPACITY, REO) Baotou 55,000t India 3,000t Byypproduct of iron ore mine Subsidiary of Indian AEA Moving to
Slide 12: Additional supply is required, with favourable elemental balance
Additional supply is required, with favourable elemental balance - inside and outside China For personal use only 2014 SUPPLY VS DEMAND SUPPLY/DEMAND ESTIMATED IMBALANCE (REO, SEPARATED PRODUCTS) (REO, SEPARATED PRODUCTS) Demand e a d vs s Supp Supply y Balance Comments • Lanthanum 53,800t 40,000t •
Slide 13: Lynas will offer the first new source of supply of Rare Earths outside China
Lynas will offer the first new source of supply of R Rare E Earths th outside t id off Chi China - Q3 2011 For personal use only LYNAS VITALS AT A GLANCE VISION: Be the leader in Rare Earths for a sustainable future. EXCHANGE: ASX Top 100; code LYC Mount Weld SHARES: 1,701m on issue OPTIONS: 85m str
Slide 14: Central Lanthanide Deposit resource of 9.99 million tonnes at 10.7%
The mine is within the Central Lanthanide Deposit (CLD) a Resource of 9 (CLD), 9.99 million tonnes at 10 10.7% 7% For personal use only for 1.1 million tonnes of contained REO CENTRAL LANTHANIDE DEPOSIT AND DUNCAN DEPOSIT RESOURCES Central Lanthanide Deposit & CLD & Duncan Mineral Resource Duncan De
Slide 15: Mount Weld initial mining campaign complete, loss-time-injury-free, on budget
Mount Weld Rare Earths initial mining campaign complete, l t lloss-time-injury-free, ti i j f on budget b d t For personal use only MOUNT WELD STOCKPILES WITH RARE EARTH OXIDE PERCENTAGES DUNCAN DEPOSIT (DD) Offices 773,000t on stockpiles 8% 13% DD CLD 17% DEPOSIT 26% 15% 13% 21% 20% Conc. Conc DD P
Slide 16: Schematic - Concentration Plant process at Mount Weld
Schematic - Concentration Plant process at Mount W ld which Weld, hi h hhas b been ffully ll pilot il t plant l t ttested t d For personal use only 16
Slide 17: The Concentration Plant commenced feed of ore on 14 May 2011
The Concentration Plant commenced feed of ore on Saturday S t d 14 M May 2011 For personal use only OVERHEAD VIEW OF THE CONCENTRATION PLANT 17
Slide 18: Views of the various sections of the plant
Views of the various sections of the plant For personal use only CONCENTRATION PLANT Ball mill and Classification Circuit View along top of Flotation Circuit 18
Slide 19: Containers of Rare Earths concentrate trucked to Fremantle for shipping to Malaysia
Containers of Rare Earths concentrate will be t k d tto Fremantle trucked F tl for f shipping hi i tto Malaysia M l i For personal use only • Mount Weld to Fremantle = 1000km 19
Slide 20: Gebeng, Malaysia, has exceptional infrastructure for a separation facility
Gebeng, Malaysia, has exceptional infrastructure required i d ffor a R Rare E Earths th separation ti ffacility ilit For personal use only PROCESSING HUB WITH EXCEPTIONAL INFRASTRUCTURE Gebeng Industrial INDUSTRIAL INFRASTRUCTURE Estate, Energy, chemicals, water, industrial land East Coast Malaysi
Slide 21: Schematic - Lynas Advanced Materials Plant core process
Schematic - Lynas Advanced Materials Plant core process, which hi h uses mature t iindustry d t ttechnology h l For personal use only 21
Slide 22: LAMP built to international environmental performance standards
The Lynas Advanced Materials Plant (LAMP) is built to international environmental performance For personal use only standards – gas, water and solids manangement Phase 1 : 11,000t REO Phase 2 : 22,000t REO 22
Slide 23: LAMP site overview
The Lynas Advanced Materials Plant (LAMP) is 0 8k wide 0.8km id (N (N-S) S) and d11.4 4 kkm llong (E (E-W) W) For personal use only COLLAGE OVERVIEW OF LYNAS ADVANCED MATERIAL PLANT SITE – FEB ‘11 Post Treatment 23
Slide 24: Piping and electrical installation has commenced
Piping and electrical installation has commenced and d iinstallation t ll ti off equipment i t iis ongoing i For personal use only C Cracking ki (R (Rotary t Kil Kiln)) Gas Treatment Primary Leaching Secondary SecondaryLeaching Leaching 24
Slide 25: LAMP scheduled to be complete in September 2011
The Lynas Advanced Materials Plant (LAMP) is scheduled h d l d tto b be complete l t iin S September t b 2011 For personal use only Upstream p and Downstream Extraction Post Treatment Tunnel Furnaces 25
Slide 26: LAMP scheduled to be complete in September 2011
The Lynas Advanced Materials Plant (LAMP) is scheduled h d l d tto b be complete l t iin S September t b 2011 For personal use only Maintenance Workshop p Reagent g Storage S g and Preparation p TNB Substation Reagent Storage Admin building 26
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 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 11,00
Slide 28: Synthetic mineral products development
Approval for on-site storage received, however applications for synthetic mineral products are For personal use only identified and development work is underway. SYNTHETIC MINERAL PRODUCTS Source Target Application* Development Status • Desulfurisation D lf i ti • Plasterboard Pl t b d • Malaysia M
Slide 29: Four pillars underpinning Lynas' operations
We are industrialising our operations to meet our customers’ t ’ expectations t ti For personal use only FOUR PILLARS UNDERPINNING LYNAS’ OPERATIONS Marketing and Sales • Serving long-term long term customer requirements and commitments commitments, and thus providing input for plant extensions and
Slide 30: Budgeted Phase 1 construction costs are fully funded
Budgeted Phase 1 construction costs are fully funded For personal use only TOTAL TO 31/1/11 FUTURE SPEND CONSTRUCTION AND OTHER CAPITAL COSTS A$mm A$mm A$mm Mount Weld Concentration Plant 70.86 56.36 14.50 Lynas Advanced Materials Plant, Malaysia 237.32 91.39 145.93 Engineering and Project Managemen
Slide 31: Strategic Alliance with Sojitz provides long term supply for Japan
The Strategic Alliance with Sojitz shall provide a stable and long term source of supply for the For personal use only Japanese market LYNAS, SOJITZ AND JOGMEC HAVE EXECUTED DEFINITIVE AGREEMENTS Sojitz – Lynas Strategic Alliance Financing Availability Distribution & Agency Agreement Agreement g Agr
Slide 32: Institutional placement and Share Purchase Plan
Lynas simultaneously completed an institutional placement and announced a Share Purchase For personal use only Plan for Lynas shareholders ADDITIONAL EQUITY RAISING • $55M Institutional Placement Fully underwritten institutional placement raising approximately A$55 million at an issue price of A$2
Slide 33: Estimated capital and operating costs to fund Phase 2
Summary of estimated capital and operating costs to fund Phase 2 of the project For personal use only Construction & other capital p costs Total ((A$mm) $ ) Capex p spent p to Future capex p date (A$mm) (A$mm) Phase 2 plant & equipment for the Concentration Plant $28.0 - $28.0 Phase 2 plant & equipm
Slide 34: Eight customer agreements have been signed
Eight customer agreements have been signed; Strategic Alliance with Sojitz to provide stable For personal use only supply to Japanese customers Rhodia Customer Agreement - 8th Customer Agreement – Supply Contract S Supply l Contract C t t Strategic Alliance with Sojitz • Long term contract • >US$200
Slide 35: Acquisition of additional Rare Earths resources in Malawi
Lynas has completed the acquisition of additional R Rare E Earths th resources iin M Malawi, l i AfAfrica i For personal use only K points Key i t ffor Kangankunde K k d (KGK) Fully permitted for operations Inferred Resource of 107,000 tonnes REO at an average grade of 4.24% REO, with a 3.5% cut
Slide 36: Two JORC compliant deposits; work commencing on Kangankunde
Lynas now has two JORC compliant deposits, work k will ill commence fforthwith th ith on Kangankunde K k d For personal use only The Kangankunde Carbonatite Next steps for the Kangankunde RE deposit Initiate an environmental management plan Undertake drilling program to provide drill core and te
Slide 37: Lynas – online in 2011, delivering Rare Earths globally
Lynas – online in 2011, delivering R Rare E Earths th globally l b ll For personal use only • Our vision is to be the leader in Rare Earths for a sustainable future future. • We are close to realising this vision. • Lynas will be online in 2011, delivering Rare Earths globally. This is the first new
Slide 38: Note – Competent Person statement
NOTE For personal use only The information in this report p that relates to Exploration p 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 Corpo