why are you certain the quarterly will be + ?, page-30

cafa,
"So what has changed in the COP? Have the chemicals / processes / Malaysian labour costs gone up by 300/400% in 5 years?"

It is not as if the increase in COP has been kept secret by Lynas. Exchange rates and increased prices for reagents and energy are the culprits. The most recent COP estimate of $14-15Kg includes WA and Malaysia overheads and WA royalties.

Q2 2008 Report
"Energy prices and chemical reagents have increased in cost of the last two quarter. With the high level of variable cash costs within the plant associated with energy (30%) and reagents (50%) a reforecast of the operational costs has been undertaken. It is anticipated that the January 2008 estimate of US$5.50 ±10% / kg of final REO product has increased to US$6.20 ±10% / kg of final REO product. This cost increase would have an industry wide impact."

Q4 Report 2008
" Reduction in operating costs to US$5.75 ± 10% /kg REO of final product due to reduction in energy and re-agent prices in Australia and Malaysia"

Q3 Report 2009
"The review confirmed the forecast cash cost for production of US$5.65 ± 10% is still valid and that prices have stabilised in line with global supply chains having made the necessary adjustments resulting from the global financial crisis."

Q4 Report 2009
"Pricing for key reagents have not moved significantly in the past quarter, hence the estimated cash cost of US$5.65 +/- 10% remains valid."

2010 investor presentation p.34
"Current Budget assumes cash costs of USD 5.65 per kilo ± 10%.
2/3 of the costs are generated in Malaysia.
Reagents account for nearly 50% of total cash costs.
Followed by energy costs at nearly 30%."

16 March 2011 announcement
"Lynas has updated its estimated cash cost of production assuming Phase 2 steady state operations at A$10 per kilo of Rare Earths Oxide. This figure includes all cash costs (including administration costs in Western Australia and Malaysia) however it excludes head office overhead.
Lynas had previously estimated its cash cost of production to be approximately US$7 per kilo of Rare Earths Oxide +/- 10%. The updated estimate arose from changes in exchange rates and movements in prices for key reagents.
The updated estimate includes the following highlights:
(a) Approximately 62% of these cash costs are generated in Malaysia with the balance in Australia
(b) Chemicals account for approximately 44% of total cash costs
(c) Energy accounts for approximately 18% of total cash costs."

2012 Investor Presentation
"Estimated cash costs at steady-state 22,000 tonne per annum REO production capacity is US$14-15/kgREO
? Estimated cash cost split–70% variable, 30% fixed
? Costs include WA and Malaysia overheads and WA royalties
? Cost optimisation programs exist and will be pursued
? Lynas expected cash costs are competitive with Chinese producer costs
? Unit cash costs will be higher during ramp-up to steady-state production