The concentration grade is the primary factor determining the cost of production, based on energy consumption and raw material requirements. A 5% concentrate will require 8x that of LYC in terms of the amount of processing chemicals and energy input and 6x that of MCP. So for anyone competing against LYC, any concentrate grade of less than 20% is not competitive, uneconomic and unviable. LREE projects may even require 30% concentration grades to be viable, depending on market conditions.
LYC?s cost of production is ~$12/kg and their basket price at ~$220/kg.
A concentrate between 5-10% will have a cost of production between $50-$100/kg.
As there is an expectation that Ce and La supply will swing into surplus, what will be the impact if prices drop substantially, 40-60%, or more?
It would mean that most hopeful LREE producers will be unable to produce at a profit, be unable to secure finance for project development and be unable to compete with Lynas and Molycorp, in terms of selling price, quality and grade.
This would make the ?in situ values per kg? of the wannabes look sad indeed despite whatever claims to being HREE-weighted they might have - as in all reality most claims of having 'significant' HREE is only useful for presentations and grabbing the odd headline - no company has actually shown the ability to extract and separate these trace amounts of HREE.
Grade is King - Concentrations Grade That Is!
NTU Price at posting:
56.5¢ Sentiment: LT Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)