Ann: Malaysian Operating Licence Update, page-49

Extracts from AFR late today:
Lynas averts ‘hardship’ year, ekes out extra six months in Malaysia
Elouise FowlerReporter
Updated May 8, 2023 – 5.29pm

Lynas Rare Earths’ net profit will surge by 70 per cent, analysts predict, following the Malaysian government’s decision to grant the Australian company an extra six months to process critical minerals at its flagship plant.

The reprieve averts a production shutdown and buys Lynas more time to build its new Kalgoorlie plant in Western Australia ahead of Malaysia’s ban now coming into force on January 1, 2024.
Lynas, the world’s largest producer of rare earths outside China, made the last-ditch attempt to overturn the ban – which was due to come into effect on July 1 – on importing and processing rare earths that leave low-level radioactive residue.
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The extension granted by Malaysia’s Minister of Science, Technology and Innovation, Chang Lih Kang, means 2024 will now be a year of “orderly transition” rather than hardship, said analysts at Barrenjoey.
“Lynas would now be able to restructure its industrial footprint in a more orderly fashion. Lynas would benefit from more cash flow, a better balance sheet,” wrote Barrenjoey analysts Daniel Morgan, Glyn Lawcock and Jim Xu. “Financial year 2024 would no longer be a year of hardship – but instead the foundations of growth…..”
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The ministerial reprieve led Barrenjoey analysts to significantly upgrade their 2024 production guidance of neodymium and praseodymium (NdPr) by 60 per cent to reflect Lynas’ ability to continue to run the Malaysian cracking and leaching plant until the end of this year.
“This lifts our financial year 2024 net profit after tax by 70 per cent to $330 million,” the analysts said. “Our cash at bank forecast at 30 June, 2024 has been lifted to $743 million (from $576 million).
“Lynas’ financial capacity to execute on its growth strategy has been enhanced.”

Canaccord Genuity analyst Reg Spencer said financial year 2024 earnings before interest, tax, depreciation and amortisation could increase by 230 per cent to $337 million, from $103 million, assuming a base case NdPr pricing of $US80 a kilogram over the first half of 2024.
But if spot prices of $US65/kg were used to generate the EBITDA forecast over the remainder of financial year 2024, this would result in a 180 per cent uplift.
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Barrenjoey said….. “In our view, the market is overcapitalising negative and temporary news flow. An investment in Lynas today is buying into rare earths with the commodity price nearing cost support and below a sustainable incentive price for non-China supply, which we estimate at [around] $US85/