LYC: rare earth minerals the next big thing

[cantab]

Hit 70c this morning, currently 69c, big volumes - Americans buying?

[cantab]

Nice investor presentation yesterday, Huntleys upgrades to accumulate - "The ‘perfect storm’ of a structural shortfall in supply, fiscal imposts and very strong growth in demand could deliver substantial gains."

The share price has already riden from 7c to a high of 70c over 15 months, market cap now $270m

Huntleys say that if LYC increase production to 20,000 tpa the net profit would be in excess of $100m

Mining campaign starts next quarter, commissioning of rare earths processing plant in Malaysia planned for H2 2008

LYC say that their Crown metal resource right beside their proposed rare earths mine has a metal content of over $50 billion! Scoping study completed, further work to commence later this year.

[slam]

Thanks Cantab (one myself)
Got into this 28c, so not at the beginning but still happy with the progress.
Happy holder
Cheers
Slam

[cantab]

Hi Slam, yes 7c would have been nice

LYC have some significant revenue and cost advantages over their Chinese competitors (95% of world supply):

LYC rare earths content 12% compared with Chinese 5%

Value per ton 22% higher than Chinese

27% revenue advantage on world markets compared with Chinese (VAT 17% and export tarrif 10%)

Chinese are limited by producton and export quotas

LYC rare earths significantly more environmentally friendly than Chinese rare earths due to lower Flourine and Thorium content

LYC expect to be granted a 10 year tax holiday from Malaysian government

Cost of re-agents, water and electricity lower in Malaysia although labour cost is higher.

LYC also has major institutional support - Goldman Sachs, JP Morgan, Ospraie Advisors and RAB Capital are on the register

[cantab]

The Australian government is looking at phasing out standard lightbulbs and replacing with compact fluorescent bulbs which require rare earths. This will reduce the demand for electricity and in turn carbon emissions.

http://www.smh.com.au/news/environme...733741221.html

[cantab]

Things looking bright for LYC today:

A Brighter Place

Energy efficient lighting is a major application of Rare Earth phosphors. The compact fluorescent lamp (CFL) uses only a quarter of the power needed to produce the same amount of light as the standard incandescent light bulb. The potential of this application is best described by former President of the United States, Bill Clinton, “In our country, 20 per cent of all electricity is consumed by lighting. If every home replaced every incandescent light bulb with a compact fluorescent one, which costs three times as much, lasts 10 times as long, emits one third as much greenhouse gases, every purchaser of a light bulb would save 25 to 40 per cent, no matter how many bulbs they purchased, just as long they were being used. And we would cut the greenhouse gas emissions attributable to lighting in America by 50 per cent.”

http://www.lynascorp.com/application..._id=7&app_id=2

[denpal]

cantab,

Do you know which REE's are used in the compact flouro's? I can see this will be a world-wide trend, as Aus will now ban incandescents in 3 years time as not meeting the energy efficiency standard.

This is such an example of plain common sense as to be mindboggling - I didn't think politicians were so smart..............OK so what does this mean for LYC (and ARU of course!)?

[cantab]

Denpal,

From the Lynas website:

The main rare earths are Yttrium and Europium. Smaller quantities of another 5 elements may be added. LYC has Europium.

Yes this is likely to be the start of a worldwide trend. A bit strange that instead of a cost there is a financial benefit for protecting the environment. The consumer benefits financially as does the nation - need less power stations so save on capital cost, also marginal cost of electricity can be high, polluting and require foreign exchange, for example burning of oil to generate electricity.

Lynas forecast demand for REO used in CFLs increasing from 1846 tonnes pa in 2005 to 3779 tonnes in 2010. Lynas project global demand for all rare earths to be 150,000 tonnes by 2010 with supply only 100,000 tonnes.

[cantab]

Good news for LYC:

NAB to cut greenhouse impact
Carrie LaFrenz
March 14, 2007 11:00pm


THE nation's largest bank, National Australia Bank, aims to cut the group's carbon emissions, reducing its greenhouse gas impact to zero by 2010.

NAB Australia chief executive officer Ahmed Fahour said the bank would buy hybrid cars to use in its fleet, reduce energy use in offices and branches and buy up to 10 per cent green energy.

http://www.news.com.au/couriermail/s...6-3122,00.html


GM urges govt investment in batteries
March 15, 2007 - 7:04AM

The US government should invest heavily in new battery technology to power electric cars and lower gasoline use, the chairman and chief executive of General Motors Corp. says.

http://www.smh.com.au/news/Business/...722596686.html

[cantab]

quote:Originally posted by denpal

cantab,

Do you know which REE's are used in the compact flouro's? I can see this will be a world-wide trend, as Aus will now ban incandescents in 3 years time as not meeting the energy efficiency standard.

This is such an example of plain common sense as to be mindboggling - I didn't think politicians were so smart..............OK so what does this mean for LYC (and ARU of course!)?

Denpal, see the LYC website for an analyst's update on the impact on LYC of the switch to CFL's.