sales projections , page-46

Lynas being a diversified industry, having a customer base with specific supply contracts, strategic partnering and salable co-products, imho, makes it difficult to project. Who honestly knows the exact terms of agreement for each contract. They all differ. Arrangements are different, length, type of supply, pricing, and added adjustments. Have no opinion regarding anyone crunching figures, just think it is hard to know what to take into consideration when calculating at this time.
Lynas’ customer agreements are based on ‘fixed volume’. I understand the majority of agreements being take-or–pay contracts, whereby the customer has an obligation of either taking delivery of goods OR paying a specified amount for not buying. Lynas has entered into contracts with “big big main users” (EN) that will buy the fixed volume or having to pay a provision for not buying, still guaranteed revenue.
Lynas most likely will use fixed price with ‘escalators’ for un-contracted volumes. Not unusual in this type of industry, very typical when supply is purchased over a period of several years, as Lynas’ long-term agreements are. I would expect pricing adjustments to be made periodically throughout the life of these contracts to reflect stable prices, materials and labor.
Remain confident that reasonable contract agreements were made to protect both supplier and buyer. Hopefully Lynas disclosing more on customer agreements end of quarter.