Lynas Rare Earths Limited · ASX:LYC
Lynas Rare Earths — The Chinese Society of Rare Earths — Critical Metals Investment Summit 2011
23 slides from Lynas Rare Earths's conference presentation, Jan 21, 2011
Slide 1: China’s Role in a Changing Global Rare Earths Market
Critical Metals Investment Summit Vancouver, Canada Jan. 21- 21-22, 2011 China’s Role in a Changing Global Rare Earths Market Dr. Chen Zhanheng, PhD Director of Academic Department The Chinese Society of Rare Earths (“CSRE”) No.76, Xue Yuan Nan Lu, Beijing China, 100081 Email: chenzh@cs- chenzh@cs-r
Slide 2: Summary – Key Points
Summary – Key Points multi-supplier network Global multi- Reduced production / exports from China Increased production from new suppliers outside China Increasing demand from growing cleantech / hightech and new products China’s growing cleantech / hightech industry are buyers A return to higher pri
Slide 3: Part I Global Resources
Part Ⅰ Global Resources 3
Slide 4: USGS Global REEs Distribution 2009
USGS Global REEs Distribution 2009 Australia Brazil 5400000 48000 5.48% 0.05% Others 22000000 22.32% China 36000000 36.52% USA 13000000 13.19% CIS 19000000 Malaysia 19.27% 30000 0.03% India 3100000 3.14% 4
Slide 5: Total Rare Earth Distribution 2010 (USGS + CSRE + Roskill)
Total Rare Earth Distribution 2010 (USGS + CSRE + Roskill) India 3100000 Australia 1.91% 13420500 Canada CIS USA 8.25% 4389500 Malawi 19000000 11771600 2.70% 107000 11.68% 7.23% 0.07% South China Africa 36000000 1254000 22.12% 0.77% Greeland 4890000 3.01% Brazil Vietnam 52597000 14800000 32.32% 9.10
Slide 6: 2009 Supply: USGS+MIIT
2009 Supply: USGS+MIIT Malaysia Russia USA Brazil 380 2500 1700 650 0.28% 1.82% 1.24% 0.47% India 2700 1.97% China 129400 94.23% 6
Slide 7: Multi-Supply Trend
Multi Multi--Supply Trend An estimated 200 projects are in exploration and development. Among so many projects, there are 7 projects could produce about 10000 tons at present. In 2009, USA/Russia/India/Malaysia/Brazil produced a total of 7,930 tons of rare earth. 7
Slide 8: Forecast on Supply in 2013
Forecast on Supply in 2013 China ROW ROW 47400 35% China 87000 65% 8
Slide 9: Forecast on Target Supply after 2015
Forecast on Target Supply after 2015 China ROW China 100000 36% ROW 178000 64% 9
Slide 10: Future Demand, Balance and Opportunity
Future Demand, Balance and Opportunity Present: 50K tons outside of China To 2015: 80K tons outside of China (estimated with 15%/year demand increase; favorable global economic conditions) Quota: present, 30,258 tons, but from Jan. to Oct., 32,990 tons exported. From 2011 to 2015, quota should be 32
Slide 11: China’s Production Control
China’s Production Control Objective: Reduce environmental damage; curb illegal mining and smuggling The quantity control goal is 89.2 thousand tons in 2010, in that, 77 thousand tons is light rare earth products(86%),, and 12.2 thousand products(86%) tons is middle and heavy rare earth products(14%
Slide 12: China Consumption
China Consumptioon 80000 70000 60000 2004 50000 40000 30000 20000 10000 0 1990 1995 2000 2005 12
Slide 13: Consumption in New Products
Consumption in New Products Rapid growth since 2004, increased Chinese REE consumption from growing domestic cleantech & hightech industries. Such as magnets, hydrogen storage materials, catalyst, luminescent materials and polishing materials, increased very fast in china since 2004. In 2009, China
Slide 14: Development stages of China's rare earth industry
After 2006 Rational development stage From 1998 to 2006 Rapid expansion stage From 1990 to 1998 Steady progress stage From 1950’s to 1990 Bud growth stage 14
Slide 15: China’s Growing Consumption
China’s Growing Consumption Early signals China moves from sell side to buy side. China becomes a new market opportunity for producers outside of China Largest consumer of REE in the world Opportunity to sell other products to China related to REE industry 15
Slide 16: Situation of Quota, Export & Demand
Situation of Quota, Export & Demand 65609 65609 Quota export demand 61821 59643 56583 57400 56939 53300 53300 52051 50145 49000 48193 48000 45600 45207 41600 36074 35080 35080 25000 2004 2005 2006 2007 2008 2009 2010 16
Slide 17: Export Situation From Jan. to Sep. 2010
Export Situation From Jan. to Sep. 2010 Japan USA France Netherland Germany Italy UK SouthKorea Others UK SouthKorea 548.84 394.22 2% Italy 1% Others Germany 853.2 3580.46 945.01 3% 11% 3% Netherland 1402.61 Japan 4% 16022.57 50% France 2212.62 7% USA 6196.38 19% 17
Slide 18: Export price from Jan. to Sep. 2010
Export price from Jan. to Sep. 2010 Total amount: 32,155.92 tons. Total Value: 474.4 million US$. Average Price: 14.75 US$/Kg. For MolyCorp: —Average price in 2009 5.4US$/Kg; —Average price in 2010 16US$/kg. 18
Slide 19: International market price of rare earths
International market price of rare earths 19
Slide 20: Quota Control surged the market – prices went up
Quota Control surged the market – prices went up REE Consumers complained about increased prices but accepted them… Why? 1) Rare Earth Elements are essential and indispensable for modern cleantech and hi- hi-tech products. 2) Rare Earths represent a very small, marginal cost of the overall cost in c
Slide 21: A Return to Higher Prices
A Return to Higher Prices Higher price benefits: Past mines and projects outside China become economic Former producers will begin production; Molycorp, Lynas etc. New producers will emerge; Great Western Group etc. Production outside of China increases, accounting for a greater percentage of global
Slide 22: Investor Considerations
Investor Considerations Is it time to invest rare earths? What kind of rare earth deposits is worthy to mine? Preferably with high Heavy REEs contents, Tb, Dy, Eu. Product Structure: concentrate, single compounds, metals and alloys. To target your consumer. Environmental Cost should be concerned. Wa
Slide 23: Thank You!
Critical Metals Investment Summit Vancouver, Canada Jan. 21- 21-22, 2011 Thank You！ Wish you a great success in your business! - Dr. CHEN Zhanheng Presented on Dr. Chen’s behalf by Mr. Jay Roberge roberge@tehama.com 23
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