A visit to LAMP..., page-15

Just a little more color on the political flap that is apparently spooking investors...

OK, here is the deal, In May of 2015 Malaysia and Japan signed an agreement to "elevate their bilateral relationship", point being Malaysia and Japan have had good trade relationship going back years. Let's assume a purely hypothetical scenario where Malaysia shuts down Lynas for no obvious reason and the flow of RE's stop.

This means there will no longer be shipments of RE's to Japan. Just in time inventory means there is little buffer in the supply chain and Japanese manufacturing to a large degree would grind to a halt in a few days...

The fact is that it would probably not look good to sack Japan's manufacturing over a 8 year political spat... My guess is that there would be some dialog between the Japanese PM and Mahathir should this occur...

In reality Amanda probably already put her hand together and will lay in the weeds for a while. She can because the appropriate ministers from both countries are probably already negotiating the matter and most of the negotiations (if needed?) are being performed at that ministry level. Perhaps that explained the quiet confidence Amanda displayed when one of the analysts pressed her on details in this issue...

In any event, I hope Japan scolds Malaysia for making life so difficult for Lynas when it doesn't have to...

Another point discussed was the advent of new technology. One of the things that amazed me the most about the LAMP was the scale of things. The plant is several stories in places and spreads out with a maze of pipes, tanks, furnaces and conveyor belts across a wide section of Gebeng real estate...

To the end, I think it was Aus that asked Amanda whether or not new technology could make LAMP obsolete. Amanda readily admitted that there are some new technologies to keep an eye on. She also said that Lynas intends to maintain it's lead in the industry. I was left with the impression that it is full speed ahead with an eye in rear view mirror...

As Amanda noted Lynas is no longer a startup and is fully de-risked in this nascent technology called rare earths....

JMHO...