Uninformed commentary has questioned the relevance of my previous posts (on US govt magnet subsidies) to Lynas' wellbeing.
I didn't spell it out in detail as I thought it was too damn obvious to need a detailed analysis. (Also I believe I've mostly provided it previously.)
The first point is that Lynas is surviving just fine at present without the subsidies. Lynas is a low cost producer currently making (modest) money while most competitors inside Chine are going backwards. And there are no direct competitors outside China; MP needs to send its concentrate to China for processing.
Secondly, Lynas' share of the world market is irrelevant: Lynas has a virtual monopoly as an ex-China producer of REO and that's the relevant market.
Third, the bipartisan bill on the floor subsidises US made NdPr magnets, but ONLY if the supply chain is wholly within friendly countries. The level of the subsidy isn't totally certain for Lynas REO given the Malaysian connection: either US$20 or 30 /kg of magnet. Definitely $30 for REO from the Texas plant once it's running. Now you might quibble about whether the US is serious about implementing this bill. If in doubt, look at the already approved funding for Lynas and others to ensure the materials will be available. Also the recent US moves to disallow the use of 'unfriendly' magnets in the military points strongly to genuine support for ex-China magnet supply chains.
https://scuonline.zoom.us/j/84632954416?pwd=HA46JOBRyKV1TUsjRUwI9LNAyFXlzO.1Fourth, does the subsidy help Lynas given that it's a subsidy for magnet makers? Of course it does. Other sources probably will come online of course. But for now if anyone wants to set up NdFeB magnet manufacturing in the US accessing the subsidy there is only one source of REO that qualifies; Lynas. (Apart from a rounding error's worth from MP.)
Fifth, is the subsidy substantial? Frankly, it's HUGE. I'll address the HRE (for high end magnets) in a bit. Basically, as far as the magnet maker is concerned, the NdPr is free, but only if it comes from eligible sources. Take the lower subsidy figure: US$20/kg of magnet. The voluminous one (and I confirm his calculation) suggests the NdPr content of a NdFeB magnet is about 27%. Ignoring other materials & manufacturing costs, the subsidy pays US$20x 100/27 = US$74 per kilo of contained NdPr. Given the current price of NdPr metal is US$62 (
https://www.metal.com/Rare-Earth-Metals) US magnet makers would currently have access to Lynas NdPd at less than zero cost.
There are currently no other suppliers able to service the US magnet makers when they come online. And they will come online given their materials costs will be effectively negative at current NdPr prices.
Finally HRE. Only relevant to high-end magnets and a relatively small proportion of the total RE when used. None are currently available ex-China. USG has fully funded Lynas' expansion into this product clearly signalling that Lynas is central to their magnet plans.
Seriously, is anyone questioning the USG commitment to local NdPeB magnet making or the huge boost this gives to Lynas???
(20min delay)