summary of the current situation

Some people tried to analyze the current situation. The most popular post of the weekend by @overround did so.
While I agree with him that the drop (a selloff looks different IMO) was mainly caused by "delay fears", I'm missing a point in his analysis: what exactly has led to the "delay fears"?

IAEA-REPORT
was the report positive or not? This is hard to say. The positive aspect was that it showed no serious concerns. On the other hand nobody really was worried about that. The report showed something else that overweight the general statement: it revealed that until now only about 40% of the LAMP was done. They were definately behind schedule. So this has caused no "delay fears", the delay is on the table. Most importantly 11 recommendations came out that Lynas wants to meet. Since nobody is sure how long it takes to do so, especially setting up a long term waste management plan, this was without a doubt the #1 factor of the "delay fears".

GOUVERMENT-STATEMENTS
this pretty much equals out. The LAMP has become a political issue with a lot o safety-fears involved, some irrational, some not. Observers expected a little "show for the masses" in order to at least look concerned. On the other hand it is known that the government is supportive. However there were several statements by authorities saying the permissions are not automatic. The statements that they will not compromise on public safety must in any case been taken very serious now. Fact remains that there is no pre-operation license until the IAEA-requirements are met. "Delay fears" arise because the government might be tempted to postpone the license until the general elections are over. Especially because the efforts of the "stop Lynas" campagn are likely to intensify.

NYT-ARTICLE
The NYT articles certainly boosted "delay fears" quite a bit. LYC supporters claim cheap propaganda from US-media in order to support the american rival Molycorp. Investigations on critical content about the LAMP construction might indeed be a pro-Molycorp issue. On the other hand allegations have to be taken extremely serious as well because they were not at all backed by some quotes of "anonymous source" - as overround stated in his post. The sources of UGL Ltd. were anonymous, yes. But we have two statements from leading people of two important Lynas contractors. One is Peter Wan, the general manager of Cradotex saying "These issues have the potential to cause the plants critical failure in operation". The other one is Tim van der Zanden, AkzoNobel�s top spokesman in Amsterdam who wrote in an email-reply: "We will not certify or even consider the use of our coatings if this problem can�t be fixed".
The question is: WHY WOULD THESE TWO IMPORTANT OFFICIALS OF CONSTRUCTION CONTRACTORS CONFIRM SERIOUS CONSTRUCTION PROBLEMS IN PUBLIC??? Are these people crazy? Would they risk their business relations with Lynas for no reason? The answer is without a doubt: NO!

LYNAS STATEMENTS
Now it becomes interesting. The statements by Lynas have - much to my surprise - not been questioned here. Lynas said "plant is safe", NC speaks about "complete confidence in the Malaysian environmental standards" and the "ability to meet the requirements". Lot's of things have been said but to investors it should be most alarming, what has NOT been said! It would have been easy for Lynas to prove the allegations in the NYT-article wrong by disclosing, what material has been ordered along with further concrete details. Instead of doing that, the company has published nothing but verbiage of denials. The weak statements might not have caused additional "delay fears" but I'm quite sure, they will. Another thing that NC failed to do is inform the public in an open meeting with opposition leader Fuziah Salleh. By refusing this public discussion he refused to do just what the AIEA-report recommended: provide more transparency.

SUMMARY AND ANALYSIS
We have a company under double pressure. Political and time pressure. The company is seriously behind schedule as the IAEA-report revealed. The race is on, it's about getting a pre-operational license before the elections. The company seems to be rushing the construction, being suspectable for mistakes. Something quite obviously went wrong during construction, more information about this issue will follow shortly.
Potential aspects that can lead to delays are:
- state of construction, 60% of the LAMP still to be built
- political issues, government unlikely to grant a pre-operational license before the elections with rising pressure of protesters
- unknown timeframe until the IAEA-recommendations can be met
- unknown timeframe if parts of the construction have to be rebuilt due to mistakes as stated by officials of contractors
- growing political pressure in case NYT-allegations show, that the company did sacrifice safety aspects in order to move on quickly

My conclusion of the above points is, that a production before 2013 is very unlikely with a worst case scenario of the cancelation of the LAMP still possible. This case will become more likely if the company continues to act as unprofessional as they have been in terms of public relation failures.
I will therefore continue shorting LYC shares with a personal one year price target of 0,75 AUD.

regards
Julia