Regarding Iluka, not to cross promote, they must compel the gov to share the radioactivity risk incurred (Iluka will have to concentrate NORM and worse) or they won't get the necessary support when the protests start and they know it. They are in fact being good stewards of current shareholder monies. They could make more money processing their tailings for REE but it's not like easy money or more of the same they've been managing. The new money comes with LOTS more risk. ILU has an long-established business and has been through it; they have seen the government and public vacillate on mining-friendliness; I can't blame them for skepticism.
As for the impact on LYC if Iluka puts the idea aside, that is a good question and it could well go as PilbaraBoy suggests. Not that there aren't enough other plays, but it makes the moat Lynas built wider, deeper, more visible and more valuable. That said, I think the writing has been on the wall for awhile that Eneabba is in trouble and that plenty of folks that would move their monies already have.
And frankly I don't like LYC as much as a sole source provider as I do as a market leader, though I am decidedly more sanguine in the short term at least for now now that I know they will be producing DyTb and I don't need to be stressing on who the heck is going to, because without ex-China DyTb Lynas's magnet metals market share (most valued product) isn't going anywhere because ex-China magnetmakers aren't either; in fact that is what pushed me towards getting out a couple of years ago.
At 12,000 tpa NdPr producing sufficient DyTb to convert it to magnets, Lynas will make a LOT of money, as will their Japanese beneficiaries, but the West will want much more in time if they push to recover REE-enabled tech market share from the Chinese. The moat that looks good now might become confining and I haven't heard of Lynas 2030 yet.
Sole source might work well in a niche market, but this ain't that, imho.
LYC Price at posting:
$6.86 Sentiment: Buy Disclosure: Held
