The comment attributed to the Jap diplomat in KL suggesting Lynas supplies one third REO requirement totally underplayed the significance, probably quite deliberately.
Reality more likely Japanese NdFeB industry would likely collapse given it is now 66% dependent on LAMP NdPr:
Study of the allocation of mining quotas in relation to separation quotas shows CHRE is the only SOE positioned to export any meaningful quantity of NdPr, and they announced 2 yrs ago that their new magnetic metals plant would consume 80% of Baotou production.
Since then they have done a LRE for HRE exchange deal with Xiamen and there have been multiple reports of new metal & magnet plants in various stages on construction thru 2018. Anecdotally the Dragon is making a massive investment in NdFeB capacity and with ongoing supply constraint it is a very reasonable assumption IMO that they will have very little NdPr to export in the next year or so.
The Japanese, who invented sintered NdFeB and still hold ~45% of the high end mkt representing ~15% of global total and ~99% of ROW total, are becoming increasingly dependent on Lynas NdPr to be able to maintain their magnet industry.
Can't find it again but sometime back I saw a claim that REO flowed downstream to something like 30% of Japanese manufactured goods, some $2Trillion of $7Trn, so not difficult to understand why they might take Lynas supply very seriously.
LYC Price at posting:
$1.70 Sentiment: Buy Disclosure: Held
(20min delay)