Slide 1: Rare Earths: We Touch Them Everyday
Rare Earths WE TOUCH THEM EVERYDAY For personal use only Investor Presentation March 2011
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 cannot be substituted in many applications
Rare Earths cannot be substituted in many applications For personal use only RARE EARTHS: LANTHINIDES PLUS YITTRIUM – UNIQUE PROPERTIES • Chemical Unique electron configuration • Catalytic Oxygen storage and release • Magnetic High magnetic anisotropy and large magnetic moment • Optical Fluo
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 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 are a result of structural change as China addresses environmental issues
Supply shortfall and increasing prices are a result of structural change as China addresses environmental issues and illegal mining For personal use only HISTORIC AND FORECAST SUPPLY, DEMAND AND PRICING 200000 120.00 US$108.75/kg 180000 28 Feb 2011 100.00 160000 140000 80.00 120000 100000 60.00 8000
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 dropped due to activities to improve productivity For personal use only DEMAND FORECAST BY APPLICATION 2010 Demand by Application 2014 Demand Forecast by Application Application Demand (%) Demand (t) Applic
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 manufacturing industry is the largest non-China market For personal use only DEMAND FORECAST, NON-CHINA REGIONS USA Demand Europe Japan & SE Asia • Japan with an automotive and high-tech 100,000 manufacturing industry
Slide 8: China is a strong growth market, driven by clean-tech and high-tech industry
China is a strong growth market, driven by clean- tech and high-tech industry within 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, Critical Metals Inves
Slide 9: China's maximum production p.a. will be 100kt REO after restructuring
China’s maximum production p.a. will be 100kt REO after the industry is restructured – and as such China will move to a net importer in 2014/15 For personal use only CSRE PRODUCTION FORECAST FOR CHINESE RARE EARTHS INDUSTRY Source: CSRE, Critical Metals Investment Summit, Vancouver, Canada Jan 21, 2
Slide 10: The environmental issues which China references are real
The environmental issues which China references in communications about restrictions in Rare Earths exports are real For personal use only CSRE PRODUCTION FORECAST FOR CHINESE RARE EARTHS INDUSTRY Source: Google Earth 10
Slide 11: China aims to improve return on resources as well as stimulate Rest of World supply
China aims to improve “return on resources” as well as stimulate Rest of World supply 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 Sichuan • Chinese Gov
Slide 12: In 2010 Rare Earths supply was outstripped by demand
In 2010 Rare Earths supply (115kt REO), was outstripped by demand (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 By product of iron ore mine Subsidiary of Indian AEA Moving to higher grad
Slide 13: Our assumptions have 2014 global supply at 157kt REO, compared to demand of 177kt REO
Our assumptions have 2014 global supply at 157kt REO, compared to demand of 177kt REO For personal use only 2014 FORECAST SUPPLY ASSUMPTIONS SUPPLY SOURCES KEY UNDERLYING ASSUMPTIONS • Baotou 60,000t • Sichuan 20,000t • Baotou – 10% production increase 2010 / 2014 • Ionic Clay Regions 17,000t • Sich
Slide 14: 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 vs Supply Balance Comments • Lanthanum 53,800t 40,000t • Lanthanum - 13
Slide 15: Lynas will offer the first new source of supply of Rare Earths outside of China - Q3 2011
Lynas will offer the first new source of supply of Rare Earths outside of 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 Concentration Plant SHARES: 1,662m on issue OPTIONS: 85m
Slide 16: 15% more resources in Mount Weld; total resource of 1.4 million tonnes REO
As at September 2010, 15% more resources in Mount Weld; New Total Resource of 1.4 million tonnes of REO For personal use only CENTRAL LANTHANIDE DEPOSIT AND DUNCAN DEPOSIT RESOURCES Central Lanthanide Deposit & CLD & Duncan Mineral Resource Duncan Deposit at Mount Weld Tenements (2.5% REO cut-off) C
Slide 17: Mount Weld initial mining campaign complete, loss-time-injury-free, on budget
Mount Weld Rare Earths initial mining campaign complete, loss-time-injury-free, on budget 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. DD Plant 1.5km 17
Slide 18: Schematic - Concentration Plant process at Mount Weld
Schematic - Concentration Plant process at Mount Weld, which has been fully pilot plant tested For personal use only 18
Slide 19: Concentration Plant commissioning process has commenced
Concentration Plant commissioning process has commenced, first ore into plant due March 2011 For personal use only CONCENTRATION PLANT - FLOTATION SECTION 19
Slide 20: Majority of pre-commissioning complete, wet and dry commissioning underway
Majority of pre-commissioning complete, both dry and wet commissioning underway in various sections of the plant For personal use only CONCENTRATION PLANT Ball mill and classification circuit Flotation cells 20
Slide 21: First ore into Concentration plant is scheduled for March 11
First ore into Concentration plant is scheduled for March 2011 For personal use only CONCENTRATION PLANT Utilities – power and water Thickener 21
Slide 22: 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 • Mount Weld to Fremantle = 1000km • Transportation approx. 9% of total costs 22
Slide 23: Lynas will expand the Malaysian processing hub
Lynas will expand the Malaysian processing hub, with the ability to take multiple sources of material For personal use only PROCESSING HUB WITH EXCEPTIONAL INFRASTRUCTURE Gebeng Industrial Estate, INDUSTRIAL INFRASTRUCTURE East Coast Malaysia KNOWLEDGE INFRASTRUCTURE GOVERNMENT INFRASTRUCTURE Incl
Slide 24: Schematic - Lynas Advanced Materials Plant core process
Schematic - Lynas Advanced Materials Plant core process, which uses mature industry technology For personal use only 24
Slide 25: Lynas Advanced Materials Plant (LAMP)
Lynas Advanced Materials Plant (LAMP) For personal use only Phase 1 : 11,000t REO Phase 2 : 22,000t REO 25
Slide 26: The LAMP site is 0.8km wide and 1.4km long
The Lynas Advanced Materials Plant (LAMP) is 0.8km wide (N-S) and 1.4 km long (E-W)line For personal use only COLLAGE OVERVIEW OF LYNAS ADVANCED MATERIAL PLANT SITE Post Treatment 26
Slide 27: Select long lead time equipment and tankage is now being installed
Select long lead time equipment and tankage is now being installed For personal use only Cracking Gas Treatment Primary Leaching Secondary Leaching 27
Slide 28: LAMP is scheduled to come online in Q3 2011
The Lynas Advanced Materials Plant (LAMP) is scheduled to come online in Q3 2011d line For personal use only Upstream Extraction Post Treatment Downstream Extraction Product Warehouse 28
Slide 29: We are industrialising our operations to meet our customers' expectations
We are industrialising our operations to meet our customers’ expectations For personal use only FOUR PILLARS UNDERPINNING LYNAS’ OPERATIONS Marketing and Sales • Serving long-term customer requirements and commitments, and thus providing input for plant extensions and new facilities. Industrial • Ke
Slide 30: Eight customer agreements have been signed; Strategic Alliance with Sojitz
Eight customer agreements have been signed; Strategic Alliance with Sojitz to provide stable supply to Japanese customers For personal use only Rhodia Customer Agreement - 8th Customer Agreement – Supply Contract Supply Contract Strategic Alliance with Sojitz • Long term contract • >US$200M¹ Minim
Slide 31: The Strategic Alliance with Sojitz aims to provide stable long term supply for Japan
The Strategic Alliance with Sojitz aims to provide a stable and long term source of supply for the Japanese market For personal use only HIGHLIGHTS OF THE STRATEGIC ALLIANCE WITH SOJITZ Sojitz – Lynas Strategic Alliance Funding of Phase 2 8,500t (+/-500t) REO Allocated Sojitz Expansion to 22,000t to
Slide 32: Estimated capital and operating costs to fund Phase 1
Summary of estimated capital and operating costs to fund Phase 1 of the Rare Earths Project For personal use only Construction & Other Capital Costs Total Actual to Spend to 1st A$mm 30 Dec ’10 A$mm production A$mm Mount Weld Concentration Plant 72.0 52.9 19.1 Lynas Advanced Materials Plant, Malaysi
Slide 33: Lynas is completing the acquisition of additional resources in Malawi
Lynas is completing the acquisition of additional Rare Earths resources in Malawi, Africa For personal use only Key points for Kangankunde (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- off grade. At a 3% REO cut-
Slide 34: Lynas now has two JORC compliant deposits
Lynas now has two JORC compliant deposits, work will commence forthwith on Kangankunde 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 test resource extensio
Slide 35: Lynas – online in 2011, delivering Rare Earths globally
Lynas – online in 2011, 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. Lynas will be online in 2011, delivering Rare Earths globally. This is the first new production outside of Chin
Slide 36: 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