Slide 1: Investor Presentation December 2006
Investor Presentation December 2006
Slide 2: Disclaimer
Disclaimer ► The information contained in this presentation has been prepared using the information available to Lynas Corporation Limited (Lynas) at the time of preparation of the presentation. ► For further information about Lynas, you can obtain a copy of all recent ASX announcements made by Lyna
Slide 3: Lynas has a clear vision and strong values
Lynas has a clear vision and strong values Vision We will lead the growth of the global Rare Earths industry by creating a reliable, fully-integrated source of supply from mine through to a diverse set of customers Values Strive for excellence in safety, health and the environment Value our diff
Slide 4: Lynas is an Australian listed company
Lynas is an Australian listed company Australian Mount Weld Rare Earths resource in Western Australia Mount Weld Polymetallic resource including Nb, Ta, Ti, Zr, & Rare Earths Listed on the Australian Stock Exchange (LYC) Shares on issue 376,357,182 Options outstanding 65.7M with strike price
Slide 5: Rare Earths are vital for three important developments in our society
Rare Earths are vital for three important developments in our society Greenhouse Gas Digital Technology Energy Conservation Reduction Reduction in car exhaust Enabling miniaturisation Energy efficient products • Catalytic converter • Rare Earth magnets • Compact fluorescent lights • Hybrid vehicles
Slide 6: Rare Earths have many applications in the automotive industry
Rare Earths have many applications in the automotive industry UV cut glass Glass and Mirrors • Cerium polishing powder • Cerium Diesel Fuel Additive • Cerium • Lanthanum HYBRID electric motor and generator • Neodymium • Praseodymium • Dysprosium • Terbium HYBRID NiMH battery • Lanthanum 25+ Electric
Slide 7: Electronics is also a key industry for Rare Earths
… Electronics is also a key industry for Rare Earths Screen Hard Disk Drive/CD/DVD • Eu, Tb phosphors – CRT & PDP • Nd magnet in spindle – Backlight for LCD • Nd magnet in voice coil motor • Ce glass polish Optical Lenses • La glass additive • Ce glass polish Speakers • Nd magnets in headphones of I
Slide 8: The global chemical companies who purchase Rare Earths include
The global chemical companies who purchase Rare Earths include: -8-
Slide 9: Demand is growing over 10% p.a. from both existing and new applications
Demand is growing over 10% p.a. from both existing and new applications Demand ► Existing applications are driving sustained growth of the 95,000t Rare Earths global market Neo magnets 13% p.a. to 2010 NiMH batteries 30% p.a. to 2010 Catalysts (automotive and FCC) 4% p.a. to 2010 Phosphors 1
Slide 10: Rare Earths are natural elements, mined from the earths crust
Rare Earths are natural elements, mined from the earths crust Rare Earths is the collective name for 15 metallic elements known as the Lanthanide series, plus Yttrium P ERI ODI C TABLE OF THE ELEM EN TS 1 2 H He 1.008 4.003 3 4 Rare Earths Elements 5 B 6 C 7 N 8 O 9 F 10 Ne Li Be Atomic number 6.941
Slide 11: Where do Rare Earths come from?
Where do Rare Earths come from? ► Whilst Rare Earths are relatively abundant in the earth’s crust, they are rarely present in economic concentrations ► They are never found as free metals but as a ‘cocktail’ of the Rare Earths elements, which need separating for commercial use ► China currently supp
Slide 12: Supply is undergoing a structural change due to environmental and regulatory issues
Supply is undergoing a structural change due to environmental and regulatory issues Supply ► China continues to dominate the world’s supply of Rare Earths (~95%) ► Chinese Government announced a mining production quota of 76,000 tpa ► Chinese Government enforcing their environmental regulations caus
Slide 13: Supply-demand imbalance suggests price increases will continue
Supply - demand imbalance suggest the price increases will continue over the next few years Rare Earths market history and independent forecast (US$/kg) (REO Metric Tonnes) Based on Mt Weld Composition, FOB China basis 10.00 175000 US$8.09/kg 9.00 30-Oct-06 150000 8.00 RE Supply & Demand • Tech Cras
Slide 14: Supply-demand imbalance for elements used in magnets shows potential for price increases
Supply - demand imbalance for elements used in magnets shows potential for price increases Neodymium and Praseodymium Oxide price movement (US$/kg) 25 20 Rare Earths Price FOB China basis 15 10 5 0 06 03 04 04 04 04 05 05 05 Q 5 06 -O 6 2 2 2 2 3 3 03 6 0 30 3 ' 0 '0 '0 '0 '0 '0 '0 -0 1/ 4' 1' 2' 3'
Slide 15: The speciality Rare Earths are lagging Nickel and Zinc price movements
The speciality Rare Earths are lagging Nickel and Zinc price movements Comparison of Ni, Zn and Nd/Pr Oxide price movements (US$/tonne) (US$/tonne) 35,000 5,000 Nickel and Nd/Pr Oxide Price Nd/Pr FOB China basis, Ni LME data 4,500 30,000 4,000 25,000 3,500 Zinc LME data Zinc Price 20,000 3,000 2,500
Slide 16: Mt Weld is the richest grade Rare Earths resource in the world
Mt Weld is the richest grade Rare Earths resource in the world INSITU RECOVERABLE GRADE RESOURCE RESOURCE DEPOSIT (REO) (t REO) (t REO) NOTE Mt Weld Rare Earths Project 12% 917,000 503,000 4% cut-off Baiyun Obo, Baotou PRC 5% 17,000,000 1,700,000 Govt pressure to reduce mine rate China Southern Ioni
Slide 17: Mt Weld is geologically unique
Mt Weld is geologically unique 10 – 20% 20 – 30% 30 – 40% + 40% -17-
Slide 18: Crown Polymetallic resource
Crown Polymetallic resource Category Indicated Inferred Total Mt 1.5 36.2 37.7 Crown & Coors Ta2O5 0.037% 0.024% 0.024% Rare Metal Nb2O5 1.4% 1.06% 1.07% Deposit TLnO 1.65% 1.14% 1.16% ZrO 0.32% 0.3% 0.3% FeO3 46.5% 42.6% 42.8% P2O5 8.9% 7.96% 7.99% Y2O3 0.1% 0.09% 0.09% Al2O3 9.94% 11.3% 11.3% TiO
Slide 19: Our strategy is to develop a transparent, environmentally sound, integrated supply chain
Our strategy is to develop a transparent, environmentally sound, integrated supply chain Australia Malaysia Final Separation Stage 2 Integrated processing Open Cut Mining Solvent extraction plant to float, crack separation plants and separate REO Lanthanum Light mixed RE * Cerium 121,000 tpa of ore,
Slide 20: All Australian environmental and project approvals have been granted
All Australian environmental and project approvals have been granted -20-
Slide 21: Malaysian environmental and project approvals are underway
Malaysian environmental and project approvals are underway -21-
Slide 22: Simplified Flowsheet of Lynas' proposed Processing Plant
Simplified Flowsheet of Lynas’ proposed Processing Plant RARE EARTHS ORE CRUSHING CRUSHING && GRINDING GRINDING ‘IOM’ IRON Raw Water FLOTATION FLOTATION THICKENING THICKENING FILTRATION FILTRATION OXIDE MATERIAL FILTRATION FILTRATION RARE EARTHS CONCENTRATE WASTE WASTE GAS GAS CRACKING CRACKING Neut
Slide 23: Commissioning of the plant in Malaysia is planned for H2 2008
Commissioning of the plant in Malaysia is planned for H2 2008 ► MIDA application to be submitted this month Strategic Pioneer Status with associated 10 year tax break Manufacturing Licence 6 week review period ► Engineering design underway Review basic engineering design for Malaysian site
Slide 24: Estimated Rare Earths project schedule for Malaysian site
Estimated Rare Earths project schedule for Malaysian site, currently being finalised ► Ramp-up to 10,500t REO, including wet commissioning, is expected to take 12 months -24-
Slide 25: Key Rare Earths financials
Key Rare Earths financials China based project capital expenditure A$ 65.0M Mt Weld mine development capital cost A$ 16.2M Processing plant capital cost A$ 40.4M Contingency (15%) A$ 8.4M 30% - 40% Estimated capital cost increase A$ 20 – 26M Definitive costs available after detailed design L
Slide 26: Rare Earths summary
Rare Earths summary ► A perfect storm has hit the Rare Earths market, with demand growing strongly and supply restrictions in place ► Lynas has the only commercially viable deposit outside China, and will be one of the lowest cost producers in the world ► The plant in Malaysia brings significant tax
Slide 27: Summary
Summary In achieving our Vision we will: ► Create a globally unique strategic supplier of advanced materials – underpinned by the cashflow from our Rare Earths asset ► Create sustainable long term earnings with exposure to growth through technology advancement ► Create shareholder value in excess of