Ann: Lynas signs new customer contract , page-5

This article reminded me I had overlooked another important reason for the lack of detail. Any existing Japanese RE buyer would no doubt have direct contacts with the RE market in China, so a deal like this is best kept as quiet as possible.

http://www.igmarkets.com.au/cfd/market-update-20100929c.html

Lynas Corporation - Despite a lack of detail on the identity of the consumer or size of the contract, Lynas this morning announced a new deal with a Japanese consumer. Jitters over China's greater-than-90% control of rare earths production have more than doubled the value of Lynas shares over past three months. Furthermore, last week's reports--later denied--of China restricting exports to Japan amidst a political dispute have put more fire under prices. In a comment from BBY, it pointed out that even without a named company, the announcement is another step forward in Japan?s commitment to diversify its supply of rare earths. The broker said "rare earths companies have been very reluctant to talk about off-take partners because the partners are worried about China turning off the tap on supply. This preparedness to go on the record that they're going outside of China is new and reinforces their interest in these companies."

29/09/10 - 12:45

Ben Potter, Research Analyst