chat with matthew james

I called Lynas today for the first time ever, just to express my disquiet at two things - the sale of Crown and the scale back of the SPP.

Here is a summary of what he told me...

Re: Crown, their strategy is that Lynas does not have the capacity at this time to develop Crown and it is not a 'sale' per se - it is a right to develop that must be carried out within 5 years. If Forge has not made a commercial decision to mine within 5 years then Crown and the $20 million gets returned to Lynas.

The view of the company is that the 5,000 tonnes of rare earths (I assume that is annual output) that will come from Crown will assist them in their competitive edge in the market by keeping out new players around the 5 years out timeframe. They see no major new entrants in the market within a 5 year period. I didn't ask about the tantalum or niobium, I didn't want to take up too much of his time. I probably should have.

Re: the SPP scale back - the company took the view that they wanted to protect the share price as their number one priority. I guess the scale back is a moot point now, given that today you could have bought more at under the SPP price, like I did.