obamacare and lynas

What do Obamacare and Lynas have in common? That may sound like the dumbest question you ever heard. What is this guy smokin’? But stay with me, please.

Sorry for using an American analogy on an Aussie board, but the similarity is remarkable, at least to me. Obamacare is not generating enough new policies to become sustainable because of technical problems with their website. I presume the whole world knows this by now because the whole US healthcare system, USD2.5 trillion, is FUBAR. What does this have to do with Lynas? Let me continue please.

While the website may be preventing people from signing up it is possible to project total demand for Obamacare will only be 40% of what is needed to make the whole thing sustainable based on what the states websites are doing. How convenient for the proponents of Obamacare that they can blame technical problems from the website on the low sign ups when in reality the demand is not there. If the website were functioning properly everyone would know the whole plan was incompetently put together from the getgo and that would be a huge problem for the proponents.

See where I’m heading? Now lets look at O’CurtisCare. He has a LAMP which has a whole bunch of non fatal flaws, just like obamacare. They can be fixed as well and O'Curtis postures exactly the same way. When we get our LAMP fixed we can get up to the number we need to become sustainable, he states. Problem is he has no customers. Ever wonder why all Lynas documents have suddenly started referring to the China domestic price? Its because they are selling their products almost exclusively to the Chinese. It’s securities fraud for example in the US to sell ng in the US and make projections for future sales based on the UK price for ng. The only place you can sell concentrate in quantity is in China. Most of Lynas’ sales have been stated by the company to be various concentrates and they refer to China domestic pricing, confirming that fact.

The small amount of Ce oxide they sell may not go to China, but what difference does it make when it sells for $6 on the international market, only a fraction of the production cost. And the real production cost if calculated based on realistic volumes, not nameplate operating volume, is greater than the prices they can now realize based on China price and approx breakeven based on international prices. Lynas even provides overhead so any financial analyst not even worth his salt can calculate it.

Now what about all these potential customers? Sojitz and other Japanese companies had to make their peace with China and commit to China because they had no other alternative. Where would they get the HREEs they need if not from China? Where would they sell their downstream products if not to China? Very simply, China captured most of the downstream markets for REEs and REOs for the Japanese producers and everyone else while Lynas was messing around with Malaysian fanatics and the Malaysian government. So Sojitz and others had no choice, but to make deals with China. Neo’s, read Molycorp’s, plants are in China, as are Rhodia’s. That’s why the best the proponents of O’CurtisCare can say is they are having "conversations" with people, they once had “agreements” with.

So like Obamacare, even if O’CurtisCare gets its site up and running, that is, even if they build it, no one will come. Everything else is noise.