LYC: rare earth minerals the next big thing

[Gasbox]

http://www.bbc.co.uk/news/world-asia-pacific-14009910

"Japanese researchers say they have discovered vast deposits of rare earth minerals, used in many hi-tech appliances, in the seabed.
The geologists estimate that there are about a 100bn tons of the rare elements in the mud of the Pacific Ocean floor."

"The listed mining company Nautilus has the first licence to mine the floor of the Bismarck and Solomon oceans around Papua New Guinea. "

Nautilus Minerals are TSE and London listed `$400m market cap, little bit about the company
http://nzresources.com/showarticle.a...1&gid=30002201
Anglo American own 11%.

The level of uranium and thorium — radioactive ingredients that are usually contained in such deposits that can pose environmental hazards — was found to be one-fifth of those in deposits on land.

[stevo1]

http://www.bbc.co.uk/news/world-asia-pacific-14009910

"Japanese researchers say they have discovered vast deposits of rare earth minerals, used in many hi-tech appliances, in the seabed.
The geologists estimate that there are about a 100bn tons of the rare elements in the mud of the Pacific Ocean floor."

"The listed mining company Nautilus has the first licence to mine the floor of the Bismarck and Solomon oceans around Papua New Guinea. "

Nautilus Minerals are TSE and London listed `$400m market cap, little bit about the company
http://nzresources.com/showarticle.a...1&gid=30002201
Anglo American own 11%.

The level of uranium and thorium — radioactive ingredients that are usually contained in such deposits that can pose environmental hazards — was found to be one-fifth of those in deposits on land.

Hi gasbox marginally better than being located on the moon

[Gasbox]

Hi gasbox marginally better than being located on the moon

Exactly, very little info on estimated costs out there. 11,500 - 20,000 feet under the sea and in international waters....

[macduffy]

Mitsubishi have become a 9.99% substantial shareholder in LYC, indirectly, through their shareholding in Morgan Stanley.

http://www.theaustralian.com.au/busi...-1226088403195

Mitsubishi were involved in the earlier problems with REE refining in Malaysia, so their new interest in LYC may be a double edged sword for that company.

[geezy]

I can the start of a whole lot of mess happening in my own back yard.

[stevo1]

This looks VERY GOOD for LYC even though at this stage details are a bit sketchy.
http://www.asx.com.au/asxpdf/2011070...jsrlzdqx73.pdf

[stevo1]

I am watching with great interest this week at LYC sp.The market has had the weekend to digest the Siemens joint venture proposal.

[stevo1]

Well its taken a couple of weeks but LYC sp is on the move $2.13

[Rif-Raf]

The following is well worth a read for anyone not up with the rare earths story. Despite the hype in this report at the end, the numbers stack up totally.

Weiss Research. Here is the recommendation:


Flash Alert: Make These Trades Today

by Tony Sagami on July 18, 2011

For a few moments, I had visions of getting stuck in an Asian version of the 1970s movie Midnight Express. For those of you who are not film buffs, Midnight Express is a movie about an American who is sent to a Turkish prison and barely lives to talk about it.

I came within seconds of ending up in a Malaysian prison, but there was a company that I HAD to check out.

No one from Wall Street ? and I mean NO ONE ? has been allowed to visit this new Malaysian natural resource processing plant. This company has some cutting-edge processing technology, and it doesn?t want the competition to figure out its proprietary secrets.

Even if there were, I doubt many of them would make the four-hour bus trek and dare get their Gucci loafers dirty in the red Malaysian clay. But you know me. I wanted to see the progress of the construction with my own eyes ? it is progressing just fine by the way ? and chat up some of the workers, any vendors that might be making delivers, or ANYBODY else who might give me a piece of useful information.

I also wanted to take some photos because I wanted to show you the same exciting things I saw. Suddenly, two security trucks screeched to a halt in front of me, blocking my exit from the parking lot.

Six very unfriendly uniformed security guards surrounded me and demanded to know what I was doing and why I was taking pictures.

The lead guard wanted to confiscate my camera, but I wasn?t about to give it up because it still had photos from the palm oil, rubber, and timber companies I had visited earlier.

Another guard was on his walkie-talkie calling for either backup or the police. That is when I started having some Midnight Express flashbacks and knew I needed to do something.

I needed to get the heck out of there. I gave the guards my biggest smile and told them how much I loved to eat laksa (a popular, spicy noodle soup) and how much I LOVED Malaysia while I was backing into my car. I apologized a dozen times as I waved ?bye bye? and told my driver to get me the heck out of there! We peeled out and didn?t look back.

Here is what I learned from that would-be disaster. Construction is moving ahead at a torrid pace, and I believe the company won?t have any problems meeting its target open date in early 2012. That information alone is worth a thousand, four-hour trips on a rickety bus.

So what is going to be produced at this plant? Rare earth metals.

What are rare earth metals?

What do your cell phone, semiconductors, lasers, fiber-optic cable, plasma TVs, hybrid cars, microwave ovens, and scud missiles have in common?

They ? and just about anything electronic ? contain rare earth metals, some of the most obscure chemical elements on the planet.

Rare earth? No, I?m not talking about the 1970s rock group, and I?m not talking about uranium or plutonium. I?m talking about a group of chemical elements that began to be discovered in Sweden in 1787.

The United States Geological Survey has identified 17 elements that are considered rare earth metals, but nobody paid much attention to them until recent years because of the development of new technologies and electronic devices.

Most of the world?s advanced defense, medical, and high-tech electronics simply won?t work without rare earth metals. These metals have special physical and chemical attributes, including high degrees of magnetism, luminosity, superconductivity and environmental non-toxicity.

These obscure metals are so critical to our modern world that they are as strategically important as oil, copper, uranium, natural gas and coal. And I believe that an investment in rare earth metals will be the best natural resources investment you ever make.

Four Reasons You Need to Invest in Rare Earth Metals

Reason #1: Booming Demand. Ten years ago, the world used 40,000 metric tons of rare earth metals a year. Today, it uses 125,000 tons a year but is expected to grow to more than 200,000 tons by about 2014.

The reason for the soaring demand is simple: The world is building and consuming more high-tech devices. Plus, new demand from green energy initiatives are gobbling up all the rare earth metals the world can produce.

The consensus of the forecasts I?ve read predict a 40,000 ton shortage by 2015.

?It is estimated that Chinese domestic consumption of rare earth materials will outpace Chinese domestic supply between 2012 to 2015. It is unclear whether rare earth material will be available outside China in the coming years,? the U.S. Magnetic Materials Association said.

Here is a link to a two-minute Reuters news video about the demand for rare earth metals that I highly recommend you watch. http://www.youtube.com/watch?v=q2CpFYCqZz8

No question, the world is headed for a supply/demand imbalance and that will push the price of rare earth metals higher. Much, much higher.

Reason #2: Global Supply Controlled by China. Until 1948, most of the world?s rare earths were sourced from placer sand deposits in India and Brazil when South Africa became the largest producer. India and South African still produce rare earths, but China has zoomed past everybody since the 1980s.

This number is almost hard to believe but it is absolutely true: China produces and controls 95% of the world?s production of rare earth minerals. Yup, 95%!

The problem is that China currently uses about two-thirds of what it produces, but is on a consumption trajectory where it will use everything it produces in a few more years. When that happens, the United States and the rest of the world will be S.O.L.!

In September, China announced its plans to lower its export quota of rare earth metals to 35,000 tons per year in 2010-2015.

Wait, it gets worse. China?s Ministry of Industry and Information Technology is considering a ban on exports of terbium, dysprosium, yttrium, thulium and lutetium.

It?s part of a plan that Deng Xioping started almost two decades ago when he said that rare earth metals would ?Do for China what oil did for Saudi Arabia.?

Reason #3: A Matter of National Security. Every high-tech piece ? and I mean EVERY ? of high tech military warfare is made with rare earth metals, including precision-guided munitions, night vision goggles, radar and lasers.

If we lost our supplies of rare earth metals, our country?s ability to produce many of these weapon systems would cease to exist. Since China controls 95% of the world?s supply of rare earth metals, we are extremely vulnerable.

The General Accounting Office (GAO) said that the United States produced zero rare earth elements in 2009 and that it will take up to 15 years to rebuild our domestic rare earth supply chain.

?The United States has the expertise, but lacks the manufacturing assets and facilities to refine oxides to metals. Refined metal is almost exclusively available from China,? states the GAO.

The U.S. Magnetic Materials Association said that the United States is already in a ?silent crisis. It is unclear whether rare earth material will be available outside China in the coming years.?

In June 2009, the U.S .House of Representatives passed HR 2647, the National Defense Authorization Act (NDAA). Section 828 of the Act includes language concerning ?the availability of rare earth materials and components containing rare earth materials in the defense supply chain.?

Section 828 notes that ?less common metals? such as the rare earths and thorium were ?critical to modern technologies, including numerous defense critical technologies and these technologies cannot be built without the use of these metals and materials produced from them and therefore could qualify as strategic materials, critical to national security.?

Representative Ike Skelton, chairman of the House Armed Services Committee, said ?China is a rapidly rising military and economic power and the fact is that they cornered the market on these rare earth metals that are essential for a lot of our advanced weapons systems as well as a lot of manufacturing in the United States.?

U.S. Rep. Mike Coffman (R-CO) said, ?We need to move aggressively on this issue now before it?s too late.?

In the coming 15 years it will take to rebuild our own rare earth metal supply chain, you can bet that our military industrial complex is going to be a big buyer and stockpiler of rare earth metals. This should put upward pressure on prices.

Reason #4: Green Energy and Rare Earth Metals. Rare earth metals are also a back door way to profit from the ?green? revolution. That is because most of the green energy initiatives cannot function without rare earth metals.

Three green technologies ? hybrid cars, solar panels, and wind turbines ? use mountains of rare earth metals.

* Hybrid vehicles, such as the Toyoto Prius and Honda Insight, are big users of rare earth metals. Each car has about 2 kg of neodymium in its rechargeable nickel hydride battery and another kilogram or so of lanthanum and praeseodimium in the drive train.

* Solar panel efficiency is measured as a percentage of light energy that is converted to electricity. Silicon solar panels are 25% efficient, but the newest generation of solar panels, called multi-junction solar panels, have efficiencies greater than 40%. These solar panels use the rare metal indium.

* Every wind turbine tower has a massive, highly engineered electromechanical system in it that couldn?t operate without lanthanoid.

Here is a link to a very informative video about the role that rare earth elements play in green energy. http://www.youtube.com/watch?v=RxZLKiQd0yk

The green-energy revolution is still in its infancy, and its inevitable growth will place huge demand for rare earth metals and send prices through the roof!

So how can you profit from the boom in rare earth metals? By investing in the company that I visited in Malaysia.

How to Profit From the Rare Earth Metals Boom:
Buy Shares of Lynas Corp.

Lyans is an Australian company that explores for, mines, processes, and distributes rare earths metals. It is about to break China?s stranglehold on the rare earth market with its Malaysian processing plant.

This new plant ? the size of 14 football fields ? will be the first rare earth metals processing facility outside China in decades!

Once completed, Lynas will have the capacity to provide 30% of the world?s demand for rare earth metals.

The stock is dirt cheap. It has ZERO debt and $288 million of cash in the bank.

Lynas isn?t making any money ? yet. But once the facility is up and running, the Malaysian government estimates that this plant will generate $1.66 billion in annual profits, which works out to 91 cents a share.

Now, 91 cents may not sound like a much, but Lynas is trading for only two times those projected earnings now. Once the Wall Street crowd catches on to this amazing gem of a company, it should trade for five, 10, or even 15 times earnings.

This $2 stock could turn into a $20 stock in 18 to 36 months.

Lynas trades on both the Australian Stock Exchange and the U.S. over-the-counter (pink sheets) market. When possible, I recommend that you buy on a stock?s home exchange. For Lynas, that means your best bet is the Australian market.

I know, however, that some people don?t like to trade outside the United States, so you can buy on the OTC market. If so, you MUST use a limit order to protect yourself from getting scalped by the market makers. Here is what you should do:

If you buy on the Australian exchange, buy 1,000 shares of Lynas Corp., symbol LYC.AX, at the market. Don?t let that big number of shares worry you because it works out to about $2,000 in U.S. dollars.

If you prefer the over-the-counter market, use a limit order and buy 1,000 shares of Lynas, symbol LYSCF.PK at 2.00 or better.

[p2r]

I think LYC has been holding up well in recent volatile days