Largely irrelevant CJ, and I hear what you are saying re Govt's though it is worth noting the DOD tenders have a strong focus on a commercially viable processing operation NOT simply sponsoring a charity case to meet the tiny DOD direct demand. That fact gives me greater confidence this time around but as you suggest we wait the results as there is no guarantee any funds will be allocated.
Blueline JV was probably predicated on DOD tenders but not necessarily dependent on them given +90% of output will be sold to non US customers particularly the Tb/Dy to existing Japanese NdFeB customers completing magnet supply chain at an opportune point in time given what appears now to be a serious supply constraint on Sth China ionic clay supplies due to enviro clampdown.
DOD tender certainly fortuitous, and potentially has ramifications for LRE supply into US, but Lynas would have been watching for the right time & circumstance to value add the SEG/HRE stream regardless.
If the DOD tender efforts fall over, and they are really predicated on the US creating the right policy settings to attract a Jap mag maker into US domestic production, strong probability Lynas would still proceed with the relatively small CapEx to build out the Blueline JV to service its existing Jap mag customers, effectively the ROW NdFeB industry.
Language from Lynas suggests JOGMEC/JARE is quite prepared to assist further at Kal if required, and I have NO doubt that would extend to a Tb/Dy supply chain via Blueline JV if required, but Lynas would much prefer the independence if they can join all the dots. Of course one of the BIG dots is the pricing of NdPr over the next year or so.
LYC Price at posting:
$2.19 Sentiment: Buy Disclosure: Held
(20min delay)
