Noise...

I think that Lynas is in a perfect storm of bad news and investors are over reacting to the company as a whole.  Looking out long term (1 year) Lynas will be up and running the C&L facility which will provide tremendous amounts of rare earth ore, ready for separation.  By then the world will figure out there are no shortcuts to producing re's at this time and Lynas and Amanda will be rewarded with a company that will be in the right place at the right time…

It also stands to reason that this Malaysia approval review will be favorable to Lynas in large part to Japanese influence, also the global economic implications that could be detrimental to the region including China itself.  Since Lynas is pretty far up steam in the supply chain, a shut down would be felt immediately and the global outcry created by any Lynas slow/shut down would be enormous and possibly suicidal to the Malaysian growth initiative...

Sure things look a bit dismal at this point but this is to be expected given the world economic woes and the uncertainty of Malaysian politics. Lynas as an investment requires vision and an understanding that the fundamentals of this company have not changed.  It’s no secret that commissioning at Kalgoorlie is challenging but will require far less in terms of commissioning than the LAMP which involved new processes to tune the individual circuits and perform separation at scale.  Many of the key personnel that developed the LAMP are working on the Kalgoorlie project…

Also Amanda has her hands full once again with the Malaysian political system however this time she has a lot more ammo and the support of Japan.  Perhaps the Samurai bonds (200bYen) Malaysia owes Japan will become known as the savior bonds and help quickly mitigate this latest issue…

Six months months from now It is likely that Kalgoorlie will be operating C&L with production amounts that exceed the maximum capacity of the LAMP and creating another expansion opportunity.  Globally there is a better chance that someone will conquer perpetual motion than Elon having success with his new technology to replace Neo as a major building block in motors.  Maybe the technology is there but after the technology is developed it has to be scaled and then implemented which could be years from now if it is proven feasible…

At the end of the day it may appear that Lynas is crumbling but nothing can be further from the truth.  Amanda is constantly analyzing and executing the ambitious business plan and making decisions that for the most part have been correct and worked well to resolve the issue.  The noise over Elon’s comments combined with the latest political noise makes things worse that they appear.  Kalgoorlie will be commissioned just as the LAMP was and Lynas is solvent and with an excellent balance sheet making any dilution unnecessary for future expansion…

Time to sell?  Perhaps but consider the upside potential and the long term prospects of the company as a whole.  Amanda has guided Lynas through some difficult times and most of those journeys were made with little in cash.  Things are different now financially and Lynas as a company does not need to worry about any future cash raising that sometimes result in share dilution.  Lynas is making progress while time is standing still so in my mind it is a great place to invest…. JMHO…