"Plant value: scrap = closure / mothballing costs = NET $0 Mineral Assets + Equipment = ~$100m (given poor climate for LREE's and Mt Weld resource now proven to be high cost and metallurgically challenging)"
=> In this case all RE exploration stocks have nil value. Only option is to liquidate because its not cost effective to produce RE outside China.
AWC, Alcoa & Alcan have to shut down most of the plants. - Revenue does not cover High cost? Even when the chinese producers are producing at huge losses?
Just because the commodity price is low at present does not mean the mining and plant assets are value at zero and have to shut down.
Investors consider the commodity prices @ near term dd/ss and the industry cost curve.
LYC cost of production at 11,000tpa will be lower than most chinese producers. Even better at 22,000tpa. At present RE prices, chinese producers have stall production and incurred losses. The economic reality is most of the RE prices at present are not sustainable. LYC is getting good prices for La, Nd/Pr & SEG.
LYC Price at posting:
18.0¢ Sentiment: Buy Disclosure: Held
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