lyc price and rare earth index, page-12

From the total of 226m in Dec. subtract 75m for this quarter, another 75-85 for the hefty ramp-up quarter April-July. At the beginning of the FY13/14 coming down to 70m when producing 0.8-1 kt per month if everything goes well. At this time they are still likely to lose money producing at costs that will hopefully not be as bad as the ones Molymess faces, let's be optimistic and estimate $30/kg. Then they will be facing the same decision Molymess had a while ago, either ramp up to lower the cost per kg or slow down to lower the cash burn rate. This decision is likely to be influenced by the REO prices and either way a CR is needed.

From this stage everything depends upon the prices Lynas will be able to generate. China will still supply the basis and Lynas and Molymess will be competing. It's a buyers market and I would be surprised if the volume could be sold for over $20/kg.

The problem is the timeframe of declining prices in the LREE sector. It can go on for years before demand picks up with the supply.