LYC 0.00% $6.40 lynas rare earths limited

brainwave phase 2, page-47

  1. 171 Posts.
    Just to clarify a bit of history here.....Worley Parsons (RWP) were initially contracted on an EPCM basis to design and build LAMPson(Ph1), until suspension of the project in early 2009 due to capital problems.
    On recommencement of the project in late 2009, UGL were engaged on a similar EPCM basis to complete design and build of LAMP, requiring them to take over engineering and design from where RWP left off. The UGL contract was on an "alliance" basis (risk sharing) as I understand which fundamentally meant no blame or liability would be persued on either party if stuff ups occurred, there is obvious argument here now about the merits of this arrangement.
    The current mechanical clogging issue in my opinion can be attributed to unanticipated design faults and underestimation of the abrasiveness of the concentrate slurry flowing through, but definately different to issues raised by wanker NYT journalists in June 2011, again imo. And yes, this can be reasonably explained as normal start up issues of a plant of this complexity....painful but plausible!
    LAMPsup (Ph2) was given to Toyo-Thai (Jap/Thai Company) on a EPCC basis (fixed sum, fixed term turnkey arrangement) probably as recognition of previous contract failings. I dont believe the same mechanical issues will be replicated on Ph2.
    Also, as I have stated before, my understanding is that Ph1 and Ph2 are not separate plants, you cannot just randomly turn one off and the other one on, meaning that RE solution gets separated into different carbonate products before going on to be calcined into oxides. That is, generally speaking, Ph2 requires Ph1 to be operational to work.
    I am hopeful that the mechanical problems are fixed and the worst is behind us and I look forward to hearing of increased production figures, sales and revenues in the next quarterly.
    regards primaj
 
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