lree and hree confusion.

I'll start with the following post (from a well meaning but misguided poster no doubt!..ahem) and hopefully show such a view misses the point entirely.


"Lifton got it right:

"Lynas is not a competitor of Great Western. It is a competitor of Molycorp and every other light rare earth potential or actual supplier. In order to be able to produce commercially useful quantities of heavy rare earths Lynas will have to co-produce enormous volumes of light rare earths. If these can?t be sold at a profit then it will fail as a business"

This puts the finger right on the spot.

If at all - Lynas will only be profitable for a short period of time. Due to offtake agreements and a price decline after MCP, ARU, LYC and others have caused an LREE oversupply."


The above post and the artificial division between LREE and HREE is nonsense imo because it fails to address the simple economics of supply and demand. Not ALL LREE will be in over supply and not ALL HREE will be in short supply. It's the CRITICAL REEs (i.e neodymium, europium, dysprosium, and terbium) that really count. At todays prices these oxides contribute roughly $63, $26, $3.50, and $3 respectively, to the overall basket price. Assuming these were the only REES that Lynas could sell we would getting a basket price of ~$95/kg. If at some future date Lynas uses the ore from the heavier Duncan deposit the equivalent figures would be $61.5, $45, $39, and $13 giving a basket price of $158.5, again just from these four oxides. All in all that for me has the makings of a long and PROFITABLE future. Happy investing!