Slide 1: Investor Presentation
Investor Presentation For personal use only March 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: Mount Weld will be a major fully integrated source of Rare Earths supply outside of China
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 4: Rare Earths underpin new materials technology required to sustain the needs of today's society
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 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: Rare Earths are a group of elements with unique properties
Rare Earths are a group of elements with unique properties For personal use only Rare Earth Elements Catalytic Magnetic Electrical Chemical Optical Lanthanum (La) 9 9 9 9 Cerium (Ce) 9 9 9 9 Praseodymium (Pr) 9 9 9 9 Neodymium (Nd) 9 9 9 9 Samarium (Sm) 9 Europium (Eu) 9 Gadolinium (Gd
Slide 7: Demand for Rare Earths is driven by the underlying applications, and China dominates production
Demand for Rare Earths is driven by the underlying applications, and China dominates production For personal use only 2010 Demand Forecast by Application 2010 Demand Forecast by Region Other, 3% Phosphors, 11,000t Ceramics, 1% 6% USA, 8% Glass Additive, 13,000t Magnets, 24% Europe, 10% 8% Asia other
Slide 8: 2010 is forecast to be a year of recovery back to circa 2007/2008 consumption levels
2010 is forecast to be a year of recovery back to circa 2007/2008 consumption levels For personal use only Japanese Rare Earths Imports Chinese RE Consumption Application 2007 2010F CREIC 45,000 • Magnets 22,250 22,000 40,000 • Battery Alloy 6,200 8,200 35,000 • Metallurgy 11,000 11,000 30,000 Tonne
Slide 9: Magnets and battery alloy are forecast to be the growth drivers for Rare Earths demand 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 by Application Application Growth rate 2014 demand Phosphors, Other, 2% % p.a. tonnes 6% Ceramics, 1% • Magnets 12% 50,000 Glass Additive, 5
Slide 10: 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 capacity
Slide 11: The Chinese Government is seeking to improve the environmental impact of production in China
The Chinese Government is seeking to improve the environmental impact of production in China For personal use only Baotou Tailing Pond Southern Clay -11-
Slide 12: As supply tightened in '08 prices increased, in '09 demand dipped, prices are now recovering
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 Metric Tonnes US$13.48/kg Based on Mt Weld Composition, FOB China basis 15.00 185000 14.00 8 Feb 10 13.00 160000 Rare Earths Price Chart
Slide 13: Applications use different Rare Earths, the supply distribution does not match demand distribution
Applications use different Rare Earths, the supply distribution does not match demand distribution For personal use only Rare Earths Usage by Application Application La Ce Pr Nd Sm Eu Gd Tb Dy Y Other • Magnets 23.4% 69.4% 2% 0.2% 5% • Battery Alloy 50% 33.4% 3.3% 10% 3.3% • Metallurgy ex batt 26% 5
Slide 14: Elemental Pinch Points based on Lynas Demand and Supply for 2010
Elemental Pinch Points based on Lynas Demand and Supply for 2010 For personal use only Supply vs Demand Supply/Demand imbalance (REO, separated products) (REO, separated products) Demand vs. Supply Lanthanum 41,200t 30,500t Lanthanum -10,700t -27% Cerium 43,900t 38,400t Cerium -5,500t -15% Praseodym
Slide 15: Mineral scarcity – it not about size of resource, it is about production in a specific timeframe
Mineral scarcity – it not about size of resource, it is about production in a specific timeframe 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 respe
Slide 16: Lynas is the leader among defined Rare Earths resources under development 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 $2,500.00 Steenkampskraal $2,000.00 (US $/ Tonne of Ore, prices Feb '10) Mt Weld Insitu REO Value $1,500.00 $1
Slide 17: 2014 Elemental Pinch Points – Scenario 1, maximum China supply plus new resources
2014 Elemental Pinch Points – Scenario 1, maximum China supply plus new resources For personal use only 2014 Supply Assumptions Supply/Demand imbalance (REO, separated products) (REO, separated products) Baotou 60,000t Lanthanum - 10,200t -19% Limited by iron ore mining Cerium 9,000t 16% Sichuan 1
Slide 18: Scenario 2: Reduction of Southern Ionic clay mining
Scenario 2: Reduction of Southern Ionic clay mining For personal use only 2014 Supply Assumptions Supply/Demand imbalance (REO, separated products) (REO, separated products) Baotou 60,000t Lanthanum - 14,900t -27% Limited by iron ore mining Cerium 8,700t 16% Sichuan 15,000t Praseodymium -6,400t -4
Slide 19: The Lynas strategy is to build a resource base and expand our processing hub in Malaysia
The Lynas strategy is to build a resource base to meet demand and expand our processing hub in Malaysia For personal use only Multiple Multiplemine mine sources for sources for concentrate concentrate supplies supplies Mount Weld Malawi * Industrial IndustrialInfrastructure Infrastructure Chemical
Slide 20: Mount Weld, located in Western Australia, has good local infrastructure
Mount Weld. located in Western Australia, has good local infrastructure For personal use only 30km from Laverton Airport, Post Office, Hotel, School, etc -20-
Slide 21: Basic Geology of Mount Weld
Basic Geology of Mount Weld For personal use only Carbonatite pipe (2 billion year old volcano) Surface weathered down by 1,800m creating a supergene concentration near the surface -21-
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's Central Zone Pit has a natural advantage in grade and composition
Mount Weld’s Central Zone Pit has a natural advantage in grade and composition For personal use only Mount Weld US$/kg Baotou Composition Rare Earth Elements Composition Feb 2010 By Weight By Weight Lanthanum Oxide 25.50% 6.30 25.70% Cerium Oxide 46.74% 4.60 51.30% Praseodymium Oxide 5.32% 28.60 5.4
Slide 24: Mount Weld pit floor is currently 51m below surface, the mine plan pit floor is another 36m down
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 -24-
Slide 25: Schematic of Concentration Plant process at Mount Weld
Schematic of Concentration Plant process at Mount Weld, which has been pilot plant tested For personal use only FLOTATION FILTER PRESS 40% REO -25-
Slide 26: The Concentration Plant is scheduled to commence operations by the 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 contract with Abesque Engineering has been re-initiated Mount Weld Concentration Plant
Slide 27: The Crown Polymetallic Deposit is a world class niobium asset and contains 475,000t REO
The Crown Polymetallic Deposit is a world class niobium asset and contains 475,000t REO For personal use only Crown Polymetallic Deposit Total Crown Polymetallic Mt Weld Tenements Mineral Resource Crown Polymetallic Category Indicated Inferred Total Resource Mt 1.5 36.2 37.7 Ta2O5 0.037% 0.024% 0.02
Slide 28: Lynas has acquired CSBP's rights within Mt Weld tenements
Lynas has acquired CSBP’s rights within Mt Weld tenements For personal use only Swan Phosphate Deposit at Mt Weld Lynas acquired apatite rights at Mt Weld previously owned by CSBP Limited (a subsidiary of Wesfarmers Ltd) Lynas already owns all other mineral rights within the Mt Weld tenements
Slide 29: Containers of Rare Earths concentrate will be 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 -29-
Slide 30: Schematic of Advanced Materials Plant core process
Schematic of Advanced Materials Plant core process, which is mature industry technology For personal use only CONCENTRATE TO SULPHURIC ACID MIXER Multiple workshops of solvent extraction -30-
Slide 31: Malaysia site construction: Piling for post treatment workshop
LYNAS ADVANCED Malaysia site construction: Piling for post MATERIALS treatmentPLANT workshop For personal use only -31-
Slide 32: The Advanced Materials Plant is scheduled to be completed in Q2 2011
The Advanced Materials Plant is scheduled to be completed in Q2 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 33: Six customer agreements have been signed
Six customer agreements have been signed For personal use only Rhodia Supply Contract 6th Customer Agreement – Supply • >US$200M¹ Contract • Long term 10 year contract • Long term multiple year contract • Cerium, Europium, Terbium & • Product from Phase I & Phase II of Lanthanum final separation and
Slide 34: Operational expenses are dominated by reagent and energy costs
Operational expenses are dominated by reagent and energy costs For personal use only Cash Cost per tonne of finished REO by expense type and region 70% 66% 60% Current Budget assumes cash 20% costs of USD 5.65 per kilo ± 10% 50% 2/3 of the costs are generated in 40% Malaysia 30% Reagents accou
Slide 35: Summary of estimated capital and operating costs to fund Phase 1 of the Rare Earths Project
Summary of estimated capital and operating costs to fund Phase 1 of the Rare Earths Project For personal use only Construction & Other Capital Costs Total A$mm Capex spent to Future capex date A$mm A$mm WA Concentration Plant $59.5 $13.9 $45.6 Gebeng Cracker & Separator Plant 233.5 48.5 185.0 Engine
Slide 36: Lynas – building a stable supply chain for vital raw materials to a sustainable world
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 11,000t R
Slide 37: 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