WHICH APPEAL DOES HE MEAN???
Lynas bullish despite slump in rare-earth prices
Date
April 20, 2013
Glenda Kwek
Business Reporter
Australian miner Lynas Corp says it expects to make a profit despite sharp falls in the price of rare earths, as it increases production at its controversial Malaysian plant.
The company said in its quarterly report released on Friday that it was on track to meet its target of producing 11,000 tonnes a year of rare-earth oxides in Malaysia.
It added that its Phase 2 expansion of production capacity at the plant to 22,000 tonnes a year of rare-earth oxides was near completion.
Lynas, which has battled legal challenges to its Kuantan plant, produced its first products during the quarter.
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The miner said it ''remained well funded into the generation of sustainable operating cash flow'', adding that it had $172 million of unrestricted cash on hand as of the end of March following a capital raising late last year, and a $15.2 million research and development grant from the Australian Tax Office.
Lynas said although rare-earth prices for domestic and China FOB (free on board) ''remain down significantly from the same time last year'', it expected the demand for rare earths to grow at above GDP rates in the medium term.
''At the price level that we see today, can we make money? Yes, we can still have a positive margin,'' new chairman Eric Noyrez said in an earnings call on Thursday.
Deutsche Bank analyst Chris Terry said the quarterly results were as expected and investors' biggest concern would centre on the continued slide in rare-earths prices.
''We don't see a huge downside to the pricing from here, but we haven't seen evidence that it's stabilised at this point,'' Mr Terry said. Prices for rare earths such as lanthanum oxide have fallen up to 74 per cent in the year to date.
Another factor weighing on Lynas is the outcome of the Malaysian elections on May 5. Mr Terry said the ruling party was expected to maintain power, reducing the possibility that the opposition could halt operations.
Only one appeal against Lynas' operations remains, with the outcome expected to be in favour of the miner, Mr Terry said.
http://www.theage.com.au/business/lynas-bullish-despite-slump-in-rareearth-prices-20130419-2i5q1.html
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