"If we take the fixed costs to be $50mil and Variable costs to be 70% of $15 (optimistic as $15pkg is based on 22,000 tonnes) and the sale price to be $21.50 pkg then break even would be somewhere between 4,000 and 5,000 tonnes per quarter. Am I right"
I look at it this way. Lynas will have one of the largest and most modern plants in the business when it gets its act together. It is environmentally sound which can't be said about most of the Chinese producers. This should enable them to compete on the world stage. They have the prospect of producing a better quality product.
I'm happy to see the law of supply and demand take control and set a price and allow for some profit.
I would expect current costs to be especially high considering the low production rate and the problems that have had to be overcome.
While my opinion of executives is not all that high, I have great respect for many of the staff at the actual coal face. They are the ones that will make or break the company.
LYC Price at posting:
28.5¢ Sentiment: Buy Disclosure: Held
