db- "production in malaysia going to plan"

DB has a report from their visit:

Excerpt:
Phase 1 plant operational from start to finish, Phase 2 nearing commissioning We visited the LAMP in Kuantan yesterday. The operation appears to be making strong progress towards the 11ktpa target (Phase 1). During the past few days, samples from the last of the 5 finished products were delivered demonstrating that the entire plant is working as planned. This should result in cash flow within 2 months. Phase 2 is also nearly complete (construction 98%) with commissioning due in the June quarter and production then dependent on the demand outlook. The focus continues to be on positioning the company for the long term, with the aim to have as much flexibility as possible to meet dynamic customer needs. While the risk/return is now looks more favourable,
we maintain our Hold rating. For the stock to re-rate we view the following as key (1) successful ramp up to 11ktpa run rate, (2) REO pricing finding a clear floor, (3) closing out any political uncertainty post the upcoming election.

LYC has proved the plant works
Within c.3 months, LYC has now produced all 5 finished samples; La/Ce Carbonate and HRE-SEG Carbonate were produced in late February, followed by Ce Carbonate, La Carbonate and Nd/Pr Oxide in recent days. This demonstrates that the cracking, leaching and all steps of solvent extraction arein order. The plant will now continue to ramp up to the 11ktpa run rate, where
at steady state the residence time should be c.40 days, with around 400 staff onsite (currently 1500 due to Phase 2 construction). The Water Leach Purification (WLP) residual conversion to a synthetic aggregate (most likely to be used for road products) is also well advanced. While LYC has the option to store this material, removal from site should ease any remaining community fears given the very minor traces of radioactive material (within safe levels).

REO market uncertainty remains but inventory reducing
The average FOB China price is now US$36.70kg and the Chinese domestic price is US$21.80/kg. We believe LYC will initially receive a price somewhere between the two as an entry point into the market. Given the outlook for each
of the different elements, we believe the key product will be the Nd/Pr oxide which is likely to be in the shortest supply vs. demand. Large Chinese producers remain offline, which should see inventories reduce further over the
coming months resulting in price support.

Election due any day, BN remains favourite
We expect the election will be called within weeks (it has to be called before the 28th of April), it will then likely be held within a month. Our Malaysian strategy team expect that the status quo is preserved i.e. Barisan Nasional (BN) maintains about 60% of the seats which should ensure that LYC continues to operate as planned. The latest appeal has also been dismissed, and we believe
the risk of disruptions through the court process is greatly diminishing.