Lynas Rare Earths Limited · ASX:LYC
Lynas Rare Earths — Investor Presentation (February 2011)
36 slides from Lynas Rare Earths's investor presentation, Feb 9, 2011
Slide 1: Investor Presentation February 2011
Rare Earths WE TOUCH THEM EVERYDAY For personal use only Investor Presentation February 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
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: 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 (%) Demand (t) Others, 5% • Magnets 26% 35,000 Phosphors, 10% • Battery Alloy 14% 18,600 Glass • Metallurgy ex batt 9% 11,700 Additive, 4% Magnets, 38% • Auto
Slide 6: Magnets and battery alloy are forecast to be the growth drivers
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 p.a. (%) Demand (t) Other, 5% • Magnets 12% 55,100 Phosphors, 10% • Battery Alloy 15% 32,500 Glas
Slide 7: China is a growth market, driven by clean-tech and high-tech industry
China is a 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 Investment Su
Slide 8: The market outside of China is also growing strongly
The market outside of China is also growing strongly. Japan’s 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 a high-tech manufacturing 100,000 industry is the largest market for
Slide 9: China's maximum production 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 and stimulate Rest of World supply
China aims to improve “return on resources” as well as stimulate Rest of World supply For personal use only COMPETITION – CHINA POLICY Production Quota (Tonnes REO contained within concentrate) 100000 • 1H 2011 Export Quota 14,446t 80000 Ionic Clays 60000 40000 Sichuan • No prospecting or mining lic
Slide 12: In 2010 Rare Earths supply was outstripped by demand
In 2010 Rare Earths supply (115kt REO), was outstripped by demand (136kt 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 show global supply at 160kt by 2014
Our assumptions show global supply at 160kt by 2014, compared to demand of 190kt 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 • Sichuan –
Slide 14: Structural change in the industry is occurring as China addresses environmental issues
Structural change in the industry is occurring as China addresses environmental issues and illegal mining. Demand remains robust with higher price For personal use only HISTORIC AND FORECAST SUPPLY, DEMAND AND PRICING 200000 100.00 180000 90.00 US$80.40/kg 160000 7 Feb 2011 80.00 140000 70.00 120000
Slide 15: Lynas is the leader in defined Rare Earths resources outside China
Lynas is the leader in defined Rare Earths resources in development outside China For personal use only COMPARING SIZE AND PROGRESS OF GLOBAL RARE EARTHS PROJECTS Source: the data for non-Mount Weld deposits is based on public statements by the relevant resource holders except for Dong Pao which 15
Slide 16: Lynas will offer the first new source of supply outside 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 SHARES: 1,662m on issue OPTIONS: 85m strike range 11c - $
Slide 17: Lynas is on track for production in Q3 2011
Lynas is on track for production in Q3 2011 For personal use only KEY MILESTONES TO ENSURE A RELIABLE SOURCE OF RARE EARTHS • Lynas raised A$450 million in the equity markets to fund the completion of its project • All approvals in Australia and Malaysia in place to complete construction of processi
Slide 18: 15% more resources in Mount Weld; 1.4 million tonnes of 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 19: Mount Weld initial mining campaign complete
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 19
Slide 20: 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 20
Slide 21: Concentration Plant commissioning process has commenced
Concentration Plant commissioning process has commenced, first ore into plant due March 2011 For personal use only CONSTRUCTION AT THE CONCENTRATION PLANT 21
Slide 22: Pre-commissioning complete, commissioning underway
Majority of pre-commissioning complete, both dry and wet commissioning underway in various sections of the plant For personal use only CONSTRUCTION AT THE CONCENTRATION PLANT Ball mill and classification circuit Flotation cells 22
Slide 23: First ore into Concentration plant is scheduled for March 11
First ore into Concentration plant is scheduled for March 2011 For personal use only CONSTRUCTION AT THE CONCENTRATION PLANT Utilities – power and water Thickener 23
Slide 24: Containers of concentrate will be trucked to Fremantle
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 24
Slide 25: 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 26: Schematic - Lynas Advanced Materials Plant core process
Schematic - Lynas Advanced Materials Plant core process, which uses mature industry technology For personal use only 26
Slide 27: Lynas Advanced Materials Plant (LAMP)
Lynas Advanced Materials Plant (LAMP) For personal use only Phase 1 : 11,000t REO Phase 2 : 22,000t REO 27
Slide 28: First feed to kiln at LAMP scheduled for Q3 2011
First feed to kiln at the Lynas Advanced Materials Plant is scheduled for Q3 2011 For personal use only FEATURES OF CONSTRUCTION AT THE LAMP Prefabricated Bluescope steel buildings Working on the foundations at the LAMP 28
Slide 29: First feed to kiln at LAMP scheduled for Q3 2011
First feed to kiln at the Lynas Advanced Materials Plant is scheduled for Q3 2011 For personal use only CONSTRUCTION AT THE LAMP Foundation works and steel reinforcement in place ready for further concrete pours 29
Slide 30: First feed to kiln at LAMP scheduled for Q3 2011
First feed to kiln at the Lynas Advanced Materials Plant (LAMP) is scheduled for Q3 2011 For personal use only CONSTRUCTION AT THE LAMP Kilns installed at the LAMP 30
Slide 31: We are industrialising our operations to meet 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 32: Eight customer agreements have been signed; Sojitz alliance
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$200M¹ Minim
Slide 33: The Strategic Alliance with Sojitz
The Strategic Alliance with Sojitz aims to provide a stable and long term source of supply for the Japanese market For personal use only HIGHLIGHTS OF THE STRATEGIC ALLIANCE WITH SOJITZ Sojitz – Lynas Strategic Alliance Funding of Phase 2 8,500t (+/-500t) REO Allocated Sojitz Exclusive Expansion to
Slide 34: Estimated capital and operating costs to fund Phase 1
Summary of estimated capital and operating costs to fund Phase 1 of the Rare Earths Project For personal use only Construction & Other Capital Costs Total Actual to Spend to 1st A$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 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
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
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