Lynas Rare Earths Limited · ASX:LYC
Lynas Rare Earths — Lynas — JP Morgan China Conference 2010
32 slides from Lynas Rare Earths's conference presentation, Jun 10, 2010
Slide 1: Rare Earth Metals: The Key to 21st Century Technologies
Rare Earth Metals For personal use only The Key to 21st Century Technologies June 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: 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 4: The consumer electronics industry uses Rare Earths in many applications
The consumer electronics industry uses 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 PO
Slide 5: Hybrid vehicle technology is dependent upon Rare Earths
Hybrid vehicle technology is 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 -5-
Slide 6: Weight reduction in the automotive industry with Rare Earths magnets
Weight reduction in the automotive industry with Rare Earths magnets improves fuel consumption 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
Slide 7: Rare Earths play a pivotal emissions control role
Rare Earths play a pivotal emissions control role in automotive catalytic converters and clean diesel For personal use only Auto-cats In Every New Car Clean Diesel Technology Autocats convert harmful gases to inert Rare Earths compound added to diesel gases fuel in the car Rare Earths enable D
Slide 8: New generation wind turbines moving to permanent magnet turbines
New generation wind turbines are moving to permanent magnet turbines – a high growth market For personal use only Wind Turbine Power 120GW global wind generation in 2008 18% annual growth forecast to 2020 to 700GW Turbines scaling to 3MW plus, key differentiator Generator technology moving to pe
Slide 9: Rare Earths have unique properties which make them un-substitutable
Rare Earths have unique properties which make them un-substitutable in many of the applications For personal use only Lanthanides Plus Yttrium Are Rare Earths Properties Of Rare Earths Chemical ▫ Unique electron configuration Catalytic ▫ Oxygen storage and release Magnetic ▫ High magnetic anis
Slide 10: Demand for Rare Earths is driven by the underlying applications
Demand for Rare Earths is driven by the underlying applications For personal use only 2010 Demand Forecast by Application Application Demand 2010 demand Other, 3% Phosphors, % tonnes Ceramics, 1% 6% • Magnets 24% 32,000 Glass Additive, Magnets, 24% • Battery Alloy 12% 16,000 8% • Metallurgy ex batt
Slide 11: Magnets and battery alloy forecast growth drivers to 2014
Magnets and battery alloy are forecast to be the growth drivers for Rare Earths demand to 2014 For personal use only Growth Forecast by Application 2014 Demand Forecast by Application Application Growth rate 2014 demand Phosphors, Other, 2% % p.a. tonnes 6% Ceramics, 1% • Magnets 12% 50,000 Glass Ad
Slide 12: Global chemical companies who purchase Rare Earths
The global chemical companies who purchase Rare Earths include… For personal use only Enable Digital Technology Improve Energy Efficiency Environmental Protection -12-
Slide 13: The sustainability of Rare Earths supply is becoming more fragile
The sustainability of Rare Earths supply is becoming more fragile For personal use only Rare Earths Supply Sources Chinese Policy Issues (2010 capacity, REO) Baotou 55,000t 2009 Production Quota is 82,320t Relocation of iron ore mining Baotou & Sichuan: 72,300t Tailing facilities near capa
Slide 14: Supply, demand and price development
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 US$15.84/kg Metric Tonnes 24 May 10 Based on Mt Weld Composition, FOB China basis 15.00 185000 14.00 13.00 160000 Rare Earths Price Chart
Slide 15: US Government searching for solutions
US Government searching for solutions For personal use only Government Audit Office report on Rare Earth materials in the defense supply chain ► Current sources of Rare Earths ► Future Availability ► Associated National Security Risks RESTART Act of 2010 ► Re-establish competitive domestic Rare Eart
Slide 16: Chinese supply is tightening causing a ripple effect globally
Chinese supply is tightening causing a ripple effect globally For personal use only China’s export restrictions under examination against WTO guidelines -16-
Slide 17: Mineral scarcity: it is about production
Mineral scarcity – it not about size of resource, it is about production! For personal use only Shortages occur when supply as a function of time can no longer keep up with demand as a function of time The ultimate recoverable resource in the ground is irrelevant in this respect We have reache
Slide 18: Lynas is the leader among defined Rare Earths resources outside China
Lynas is the leader among defined Rare Earths resources under development outside China For personal use only Rare Earth Development Projects Bubble Size Represents Stated Production Volume $3,000.00 $2,500.00 Steenkampskraal (US $/ Tonne of Ore, prices Feb '10) (GWG option) Mt Weld $2,000.00 Insitu
Slide 19: Raising funds for Rare Earth projects take time
Raising funds for Rare Earth projects take time For personal use only ► Lynas had over US$200 million of debt finance arranged in 2008 ► GFC resulted in loss of bank finance ► In May ’09 Lynas announced a deal with China NonFerrous Metal Mining Corporation to invest in the company and provide financ
Slide 20: Mount Weld will be a major integrated source of Rare Earths supply
Mount Weld will be a major fully integrated source of Rare Earths supply outside of China For personal use only About Lynas Corporation Assets for Integrated Source of Supply Vision : Be a global leader in Rare Earths for a sustainable future Exchange: Australian Stock Exchange ASX 200 Company, code
Slide 21: Strategy to build and expand processing hub in Malaysia
The Lynas strategy is to build and expand our processing hub in Malaysia For personal use only Industrial IndustrialInfrastructure Infrastructure Chemical Chemicalindustrial Mount Weldland industrial land Malawi * Gas, Gas,Water, Water,Electricity Electricity Re-agents Re-agentsfrom fromloca
Slide 22: 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 Mount 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
Slide 23: Mount Weld pit floor and mine plan
Mount Weld pit floor is currently 51m below surface, the mine plan pit floor is another 36m down For personal use only Southern Zone Offices Overburden 773,000t on stockpiles 8% 13% 17% 26% 15% 13% 21% 20% Conc. Top soil Plant 1.5km -23-
Slide 24: Concentration Plant scheduled to commence operations by end of 2010
The Concentration Plant is scheduled to commence operations by the end of 2010 For personal use only ► All approvals in place ► Mechanical Engineering Design complete ► All major equipment procured ► Construction work recommenced onsite in April 2010, with progress on schedule -24-
Slide 25: Containers of concentrate trucked to Fremantle for shipping to Malaysia
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 Transportation approx 9% of total costs -25-
Slide 26: Advanced Materials Plant scheduled to be completed in Q3 2011
The Advanced Materials Plant is scheduled to be completed in Q3 2011 For personal use only ► Engineering Design to be completed United Group engaged as the Engineering and Construction Contractor ► All Approvals for construction in place ► Contract Status on-site Bulk earth works Substantially c
Slide 27: Malaysia site construction
Lynas Advanced Malaysia Materials Plant site construction: Piling for post ► Phase 1 : 11,000T REO treatment workshop For personal use only ► Phase 2 : 22,000T REO -27-
Slide 28: Operational expenses 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% Current Budget assumes 66% 60% cash costs of USD 5.65 20% per kilo ± 10% 50% 40% 2/3 of the costs are generated in Malaysia 30% 42% 20% 21% Re
Slide 29: 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 61.49 16.44 45.05 Gebeng Cracker & Separator Plant 232.40 45.10 187.30 Eng
Slide 30: 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 31: 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 32: 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