Slide 1: Lynas Corporation – Rare Earths – we touch them everyday
Lynas Corporation Rare Earths – we touch them everyday For personal use only Investor Presentation 1 August 2013
Slide 2: Disclaimer
Disclaimer For personal use only This Presentation has been prepared by Lynas Corporation Limited (ABN 27 009 066 648) (Lynas or the Company). This Presentation contains summary information about Lynas and its subsidiaries (Lynas Group) and their activities current as at the date of this Presentatio
Slide 3: Key investment themes
Key investment themes For personal use only Company overview 1 Rare Earths production and shipments commenced at the LAMP 2 Focus on cost savings and “right-sizing” business, yet ready to respond to improved market conditions 3 Experienced management team 4 Off-take arrangements through strong custo
Slide 4: Company overview
Company overview For personal use only Building a fully integrated source of Rare Earths from mine to customers Primarily involved in the exploration, development, mining and processing of Rare Earth minerals ASX-listed, market capitalisation of A$800m as of July 31, 2013 Owns and operates:
Slide 5: Agenda
Agenda For personal use only Introduction Safety, environment and community engagement Operations: Western Australia Malaysia Sales and Marketing Financial overview 5
Slide 6: Lynas has a strong safety track record
Lynas has a strong safety track record For personal use only A safe, sustainable supply chain is a MUST for the industry Western Australia Operations Gas Treatment Externally certified to OHSAS18001:2007 OHS Systems Management Six Lost Time Injury (“LTI”) incidents in the 5-year of construction/
Slide 7: Environmental monitoring
Environmental monitoring For personal use only Lynas’ operations are safe for our workers, host communities and the environment Environmental protection measures include: Waste water treatment (full neutralisation) Gas cleaning system Dust collection system Solid waste management plan Envi
Slide 8: Lynas is committed to community engagement
Lynas is committed to community engagement For personal use only Lynas strives to create shared value through relationships with the community Malaysia Lynas has conducted a large scale public consultation effort specifically focused on issues such as safety, health, emissions and safe handling an
Slide 9: Agenda
Agenda For personal use only Introduction Safety, environment and community engagement Operations: Western Australia Malaysia Sales and Marketing Financial overview 9
Slide 10: Production process overview
Production process overview For personal use only Vertically integrated operations from mining at Mt. Weld to oxide production at the LAMP Rare Earths Solution 10
Slide 11: Mt. Weld Mine & Concentration Plant
Mt. Weld Mine & Concentration Plant For personal use only Overview of Australian assets Mt. Weld Mine Location of the Mt. Weld Project & Concentration Plant The highest grade known deposit of Rare Earths in the world Consists of the Central Lanthanide Deposit (“CLD”) and Duncan Deposit Located
Slide 12: Resources and reserves
Resources and reserves For personal use only Mt. Weld contains one of the world’s largest and highest grade Rare Earth resources CLD reserves are sufficient to imply a mine life in excess of 25 years at the Phase 2 production rate of 22,000tpa REO Greater proportion of the higher value heavy Rar
Slide 13: Central Lanthanide Deposit
Central Lanthanide Deposit For personal use only CLD is the world’s highest grade known Rare Earths orebody Recent drilling on the western side of the CLD has increased confidence levels in the resource with a large portion of the resources in the measured and indicated categories Above a REO cu
Slide 14: Agenda
Agenda For personal use only Introduction Safety, environment and community engagement Operations: Western Australia Malaysia Sales and Marketing Financial overview 14
Slide 15: Malaysia operations – Lynas Advanced Materials Plant
Malaysia operations – Lynas Advanced Materials Plant For personal use only The LAMP facility is strategically located in Malaysia Stable operating environment and a sovereign credit PERLIS Kangar THAILAND rating of A3 Alor Setar Kota Baharu LANGKAWI Gebeng is a hub into Asia with exceptional KED
Slide 16: Lynas Advanced Materials Plant – operational update
Lynas Advanced Materials Plant – operational update For personal use only June 2013 quarter Production: 144 tonnes REO equivalent products Shipments: 117 tonnes REO equivalent products Some issues identified relating to clogging and premature wearing of equipment that are affecting the ability
Slide 17: LAMP Phase 2 ramping up operations
LAMP Phase 1 ramping up operations LAMP Phase 2 start-up expected Q3 2013 For personal use only ANTICIPATED PHASE 1 ─ 11,000t REO CAPACITY Major Applications VOLUMES (tpa) Ce carbonate 2,600 Autocat, Chemical Catalysis La carbonate 1,350 FCC, NiMH batteries Ce / La carbonate 4,000 Polishing, NiMH ba
Slide 18: Agenda
Agenda For personal use only Introduction Safety, environment and community engagement Operations: Western Australia Malaysia Sales and Marketing Financial overview 18
Slide 19: Sales and marketing – customer agreements
Sales and marketing – customer agreements For personal use only Lynas has agreements to supply Rare Earths products to credit-worthy counterparties globally Based on current customer agreements and negotiations, Lynas currently expects to sell its annual Phase 1 production Market growth is expec
Slide 20: Rare Earths prices
Rare Earths prices For personal use only Mt Weld basket price history 2008-2013 Mt Weld basket price history last 12mths 250 60 50 200 China domestic price has risen 21% since May13 40 USD/REO kg 150 USD/REO kg 30 100 20 50 10 0 0 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jul-12 Sep-12 Nov-12 Jan-13
Slide 21: Rare Earths market data - Disclaimer
Rare Earths market data - Disclaimer For personal use only The slides in this presentation containing Rare Earths market data have been sourced from independent analysis of end application demand, along with Lynas estimates of quantities of Rare Earths end use in various key applications. Althou
Slide 22: Demand drivers – Rare Earth uses
Demand drivers – Rare Earth uses For personal use only REO demand growth outlook 2015E Expected Global Rare Earths demand by application CAGR Sector 2012-2018 Rare Earths used Other NiMH Batteries Optical Glass 4% 10% UV Cut 3% NiMH Batteries 3.3% La, Nd 2% Magnets 10.1% NdPr, Dy Polishing 11% Autoc
Slide 23: Rare Earths market balance outlook
Rare Earths market balance outlook For personal use only Elemental market balances and demand growth rates La Ce NdPr Sm Eu Gd Tb Dy Y 12% 2012-2020F REO Demand Growth (CAGR) 10% Dy 1.5ktpa Gd 8% 1.2ktpa Sm 0.6ktpa 6% 4% NdPr 54.3ktpa La 2% 38.0ktpa Ce 36.1ktpa 0% -2% Y Tb 5.4ktpa -4% 0.3ktpa Eu 0.3
Slide 24: Sector outlooks
Sector outlooks For personal use only Demand outlook NiMH Batteries The main growth application for NiMH batteries is in Hybrid Electric Vehicles (~14% CAGR from 2012-2017) Other applications for NiMH batteries also include small electrical appliances Toyota has indicated it will continue with
Slide 25: Agenda
Agenda For personal use only Introduction Safety, environment and community engagement Operations: Western Australia Malaysia Sales and Marketing Financial overview 25
Slide 26: Cash costs
Cash costs For personal use only Key points Estimated cash costs at steady-state 22,000 tonne per annum REO production capacity is US$14-15/kg REO Estimated cash cost split – 70% variable, 30% fixed Costs include WA and Malaysia overheads and WA royalties Cost optimisation programs exist and
Slide 27: Lynas cash balance and June quarter cashflow
Lynas cash balance and June quarter cashflow For personal use only CASH FLOW A$M OPENING CASH BALANCE 1 APRIL 2013 193.8 INFLOWS Cash receipts from the sale of goods 0.6 Interest income 1.6 TOTAL INFLOW OF FUNDS IN THE QUARTER 2.2 OUTFLOWS Mt Weld Concentration Plant – Phase 1 - Malaysian Advanced M
Slide 28: Conclusion
Conclusion For personal use only Highlights 1 Rare Earths production and Production and shipments commenced at the LAMP shipments at the LAMP Customer qualification process ongoing Focused on cost savings, Enhanced use of Group shared services 2 ready to respond to Ramp-up of Phase 2 product
Slide 29: NOTE
NOTE For personal use only The information in this presentation 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 and