business times article 3 jan 2014

Hi all
An interesting article appeared in today's edition of Business Times online - the English language business and finance newspaper based in Singapore, but with branches in other places inc. Malaysia.
The URL is : http://www.btimes.com.my/articles/lynaz/Article/

The text quotes the head of Research at Malaysian Industrial Development Finance Corp. He seems to think Phase 1 production is on target for 11000 tpa and that all work to enable Phase 11 is complete. So Is he well informed? Its reasonable to expect that the MIDF has good information. Really - We are all just waiting for LYC to make a statement, but in the meantime - for what it 's worth - here is the text of the article:

"THREEFOLD CAPACITY INCREASE: But operating level will likely be driven by market conditions, such as prices


LYNAS Corp Ltd, which is building the world's largest rare earth extraction plant in Pahang, has completed the Phase 2 expansion but the operating level will be based on economics.

Phase 2 will increase production capacity at the Lynas Advanced Material Plant (LAMP) in Gebeng, Kuantan, by threefold, from 11,000 tonnes of rare earth oxides per annum (tpa) to 33,000 tpa.

The development was fully funded via a US$250 million (RM817.5 million) funding, of which US$225 million was loaned from Sojitz of Japan and the balance from equity participation by Japan Oil, Gas and Metals National Corp.

Although ready to start operation, the Australian group is putting Phase 2 on hold and any production ramp-up will be driven by market conditions, said MIDF Research head Zulkifli Hamzah.

"The operation will depend on whether they make money based on prevailing prices. Prices need to be higher for Lynas to start production at Phase 2," he told Business Times.

Prices for rare earths rose in 2010 and 2011 on the back of slashed Chinese export quotas and speculative trading, reaching a peak in July 2011 before slumping as China ramped up production and high prices eroded demand.

China has been the main producer of rare earths, accounting for 90 per cent of global supplies. Out of this, 50 per cent is for domestic consumption.

Zulkifli said currently, production rate at Phase 2 is low and will remain relatively low until the work programmes in the front end of the plant are completed by the end of this month.

He said the ramp-up in the numbers will be significant from early next year, with production rates matching LAMP's current 11,000 tpa.

After starting commercial production at LAMP in February, following long legal battles with opponents, Lynas has increased output to 11,000 tpa.

Given its growing list of applications, demand for rare earths is expected to grow at a compounded annual growth rate of about 5.8 per cent from 2012 to 2018, Zulkifli said.

It could increase to 160,000 tonnes this year and further strengthen to between 200,000 and 240,000 tonnes in 2020, he added.

Lynas has contracted to sell 80 per cent of its output to the Japanese fund providers.

"The group's focus now is on broadening its product offering to meet market needs through the utilisation of Phase Two tunnel furnaces (for additional oxide production).

"Lynas will continue to look at other areas of the supply chain such as metal, alloy, magnets, where it might invest either on its own or with strategic partners," Zulkifli said."

Read more: Phase 2 expansion of Lynas plant completed http://www.btimes.com.my/articles/lynaz/Article/#

Cheers to all! (both the Optimists and the Pessimists!)
Dave :)