LYC - Lynas Rare Earths
- Thread starter nioka
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Yeap and I own a bit for the super
Good morning
Article published today (03/02/24) AFR. Most interesting banter... with respect to Lynas and MP Materials merger speculation. The journalists have not disclosed any firm source but have used the words, 'Industry sources', without any further supporting comments...particularly from Lynas or MP Materials.
Brad Thompson and Andrew Tillett
A collapse in prices and the new Chinese trade restrictions have raised the prospect of Lynas Rare Earths joining forces with its New York-listed rival, MP Materials.
Industry sources suggest Lynas and MP might be working on a deal that would bring together the world’s two biggest non-China producers of rare earths materials essential in defence and other industries.
Lynas did not respond to requests for comment on Thursday or Friday.
The structure of any deal remains unclear amid a slump in prices for the critical minerals and fears in the Western world about China’s stranglehold on supply. Lynas, with a mine in Western Australia and plant in Malaysia, and MP, with its operations at California’s Mountain Pass, are the leading producers of rare earths needed in electronics, renewable energy technologies and defence systems outside China. A merger would dovetail with efforts by Canberra and the White House to deepen collaboration between Australian and US resources companies on critical minerals extraction and processing on economic and security grounds to break China’s stranglehold.
The joint Critical Minerals Taskforce last year agreed to map complementary production capacities across both countries’ supply chains, mutually recognise environmental and labour standards and boost government export funding to underpin new projects.
Both Lynas and MP have been hit hard by plunging prices. MP shares are down more than 50 per cent over the last 12 months; Lynas shares have fallen about 40 per cent. China banned the export of rare earth extraction and separation technologies in December in a move to protect its market dominance. It has also raised the spectre of cutting off supply at flash points in its relationship with the US.
Lynas told The Australian Financial Review last year that it was looking for acquisitions to capitalise on the needs of its customers, including the US Department of Defence, which is anxious to wean itself off supply from China. Lynas managing director Amanda Lacaze said at the time that the company was constantly being pitched M&A opportunities and confirmed it needed a source of heavy rare earths to complement its WA operations and meet obligations to the Pentagon.
The US military is funding a Lynas downstream processing plant in Texas.
Las Vegas-headquartered MP Materials restarted its processing plant at Mountain Pass last year but, like Lynas, has been hit by weaker pricing. MP Materials has backing from Defence, including a contract to boost heavy rare earths supply. Both companies are looking to boost capacity to produce heavy rare earths such as terbium and dysprosium to complement their strengths in light rare earths in the form of neodymium and praseodymium.
Terbium and dysprosium are considered essential for the permanent magnets used in modern weapon systems and by fighter jet manufacturers such as Lockheed Martin.
Lynas is heavily backed by Japanese investors and its shareholders include mining magnate Gina Rinehart.
Lynas cited weak prices stemming from a slowdown in China as a key factor behind a big fall in revenue in the December quarter. The miner’s sales plunged more than 50 per cent to $112.5 million, down from $232.7 million one year earlier. Lynas said it was close to completing an overtime and over-budget cracking and leaching plant at Kalgoorlie in WA that would complement its Malaysia operations and was also intended to supply the Texas plant.
MP posted a net loss of $US4.3 million ($6.5 million) in its most recent quarterly results, down from a profit of $US62.3 million a year earlier. However, MP chief executive James Litinsky hailed the production of separated NdPr at Mountain Pass as a milestone in ‘‘repatriating a critical national security capability’’. MP ships most of the rare earths mined at Mountain Pass to China for processing.
Have a very nice weekend.
Kind regards
rcw1
Article published today (03/02/24) AFR. Most interesting banter... with respect to Lynas and MP Materials merger speculation. The journalists have not disclosed any firm source but have used the words, 'Industry sources', without any further supporting comments...particularly from Lynas or MP Materials.
Lynas linked to merger as price falls bite
Brad Thompson and Andrew Tillett
A collapse in prices and the new Chinese trade restrictions have raised the prospect of Lynas Rare Earths joining forces with its New York-listed rival, MP Materials.
Industry sources suggest Lynas and MP might be working on a deal that would bring together the world’s two biggest non-China producers of rare earths materials essential in defence and other industries.
Lynas did not respond to requests for comment on Thursday or Friday.
The structure of any deal remains unclear amid a slump in prices for the critical minerals and fears in the Western world about China’s stranglehold on supply. Lynas, with a mine in Western Australia and plant in Malaysia, and MP, with its operations at California’s Mountain Pass, are the leading producers of rare earths needed in electronics, renewable energy technologies and defence systems outside China. A merger would dovetail with efforts by Canberra and the White House to deepen collaboration between Australian and US resources companies on critical minerals extraction and processing on economic and security grounds to break China’s stranglehold.
The joint Critical Minerals Taskforce last year agreed to map complementary production capacities across both countries’ supply chains, mutually recognise environmental and labour standards and boost government export funding to underpin new projects.
Both Lynas and MP have been hit hard by plunging prices. MP shares are down more than 50 per cent over the last 12 months; Lynas shares have fallen about 40 per cent. China banned the export of rare earth extraction and separation technologies in December in a move to protect its market dominance. It has also raised the spectre of cutting off supply at flash points in its relationship with the US.
Lynas told The Australian Financial Review last year that it was looking for acquisitions to capitalise on the needs of its customers, including the US Department of Defence, which is anxious to wean itself off supply from China. Lynas managing director Amanda Lacaze said at the time that the company was constantly being pitched M&A opportunities and confirmed it needed a source of heavy rare earths to complement its WA operations and meet obligations to the Pentagon.
The US military is funding a Lynas downstream processing plant in Texas.
Las Vegas-headquartered MP Materials restarted its processing plant at Mountain Pass last year but, like Lynas, has been hit by weaker pricing. MP Materials has backing from Defence, including a contract to boost heavy rare earths supply. Both companies are looking to boost capacity to produce heavy rare earths such as terbium and dysprosium to complement their strengths in light rare earths in the form of neodymium and praseodymium.
Terbium and dysprosium are considered essential for the permanent magnets used in modern weapon systems and by fighter jet manufacturers such as Lockheed Martin.
Lynas is heavily backed by Japanese investors and its shareholders include mining magnate Gina Rinehart.
Lynas cited weak prices stemming from a slowdown in China as a key factor behind a big fall in revenue in the December quarter. The miner’s sales plunged more than 50 per cent to $112.5 million, down from $232.7 million one year earlier. Lynas said it was close to completing an overtime and over-budget cracking and leaching plant at Kalgoorlie in WA that would complement its Malaysia operations and was also intended to supply the Texas plant.
MP posted a net loss of $US4.3 million ($6.5 million) in its most recent quarterly results, down from a profit of $US62.3 million a year earlier. However, MP chief executive James Litinsky hailed the production of separated NdPr at Mountain Pass as a milestone in ‘‘repatriating a critical national security capability’’. MP ships most of the rare earths mined at Mountain Pass to China for processing.
Have a very nice weekend.
Kind regards
rcw1
Good morning champions,
“Lynas confirms it has held confidential discussions with MP Materials Corp regarding a potential transaction, however, these discussions are not ongoing,” the company said in a statement. Lynas said it was not currently in talks with MP Materials, but did not rule out a deal in the future as it looked to build scale in the supply of rare earths materials essential in defence and other industries. Moreover, the company commented that “Lynas is implementing a strong organic growth plan. In addition, Lynas continues to seek opportunities to use our proven expertise to build scale, improve market functioning and add value for shareholders" (AFR 1.58pm 03/02/24).
Accordingly to the AFR, MP Material has a market capitalisation of $US2.87 billion ($4.4 billion). LYC has a valuation of $5.3 billion.
Guessing will hear more about this.
Not holding. Have a very nice Sunday.
Kind regards
rcw1
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"Not a real flash month for LYC …"
But it might be a flasher month next month
But it might be a flasher month next month
Good evening,
On Wednesday LYC achieved its new low, that of $5.49. Never mind.
Interesting AFR article published 25/03/24 which opened rcw1 beady eyes...
Head line:
Australia bets big on rare earths after China sparks panic
Western governments want to break China’s stranglehold on the processing of rare earths into metals and magnets vital for modern living and defence. Australia is key to that. Can it work? The recent collapse in prices for key critical minerals is accelerating attempts by Western governments to use cheap loans, grants and tax breaks to break China’s stranglehold on the processing of rare earths. Success is far from guaranteed. But taxpayer funds are now the common ingredient to boost the processing of rare earths into the metals and magnets vital for everything from mobile phones to wind turbines to advanced defence technology.The Australian government’s announcement of $840 million worth of cheap funding and grants to progress Arafura’s proposed rare earths mine and refinery in the Northern Territory is part of this global battle. It follows the Morrison government giving Iluka Resources a $1.25 billion loan to build a refinery in Western Australia to separate rare earth oxides. While Canberra has nothing like the financial firepower of the US, it is under growing pressure to also subsidise intermediate processing as well as mining of rare earths. This new push inevitably brings up old questions about backing particular companies with taxpayer money – particularly given they may still not be financially viable anyway. It’s no surprise that first production at Iluka’s refinery is delayed a year until 2026 while estimated building costs have increased by several hundred million dollars. What is not disputed is the urgent need for a strategic counter to China’s control – developed over decades – of processing technology and skills required to create the crucial metals and magnets essential for modern living and national security.
Just how much governments will pay and how feasible these alternative supply chains in all critical minerals remains a gamble. Final investment decisions are still a way off in most cases, even before protracted delays in building.
The 17 rare earth elements in the periodic table are a subset of the general category of critical minerals and found in minute quantities of much larger clay or hard rock mineral deposits. Their grade – typically measured in parts per million in clay or a small percentage in rock – is just one aspect of the challenge. Rare earth elements are neither rare nor that valuable in themselves, particularly at current prices.
But panicked Western governments belatedly realised their vulnerability to Beijing’s ability to withdraw supply of the vital metals and magnets that result from processing them.
Why Australia is a player
Complacency – compounded by the lure of China’s cheap prices – meant other countries had not even tried to master complex chemistry processes and technology needed to turn concentrates into essential ingredients for modern living and defence needs. Australia is a player not only because of its abundance of resources but also because its close relationship with the US means Australian projects or their American customers may be eligible for US government support. That can include access to generous subsidies under the Biden Administration’s Inflation Reduction Act. US determination to compete with China and to derisk supply chains ensures some financial support will continue no matter who is president.This explains why the US Export Import Bank, for example, has just provided non-binding pledges of loans to two small Australian rare earths companies, Australian Strategic Minerals and Meteoric Resources, to help them develop mines in NSW and Brazil respectively. Lynas, which has Australia’s only operating rare earths mine, has a $US258 million grant from the US Department of Defence to build a refinery in Texas.
Angus Barker, chair of Australian Rare Earths and former ministerial adviser and investment banker, says rare earths are at the intersection of two megatrends globally – decarbonisation and geo-politics.
“That’s why governments are so interested and why they are throwing money at them,” he says. “They want secure, reliable alternatives.”
Price collapse makes them just clay deposits again
But the experience of Australian Rare Earths (AR3), which plans to eventually develop a clay-based project on the South Australian border, is typical of challenges facing Australian hopefuls.As prices and recognition of critical minerals surged a few years ago, a host of speculative Australian investors and companies, including AR3, bet on rare earths as part of a new resources boom.
Depending on grade, the collapse in prices means it makes no commercial sense for most of these proposed mines to even consider developing their hard rock or clay deposits in Australia right now – perhaps indefinitely.
That’s apart from the costs and complexity of developing domestic downstream processing beyond producing basic concentrate.
But although less than expected global demand, increased supply and China’s manipulation of prices are curbing rare earths developments – along with lithium and nickel – entrepreneurial enthusiasm about the potential remains.
“In a tough environment, you focus on areas you can control – like opportunities in higher grade elements to find a path forward,” says Barker. Some Australian-owned projects are not even in Australia. Meteoric Resources is not the only Australian company with a project in Brazil.
In the US, American Rare Earths (ARR) is listed on the ASX but focused on its attempt to develop a rare earths mine in the mining-friendly state of Wyoming. After releasing its scoping study this month, its managing director, Donald Swartz, is in Australia to talk to investors about the benefits of its particular allanite minerals geology in Wyoming enabling the company to apply simpler, cheaper conventional technology to develop its rare earths resource.
As well as the ability to access US tax credits, US agencies are also helping finance a joint venture research effort into more efficient processing technologies. Swartz maintains there’s more understanding of rare earths among Australian investors than in his home country.
Yet despite Australia’s reputation for efficient mining, it has far less experience in the advanced, complex and extremely expensive processing of even intermediate material. It will be a reality test of Australia’s ambitions.
Good morning LYC believers,
Lynas Rare Earths Limited (“Lynas”) (ASX:LYC, OTC:LYSDY) will announce its quarterly results for the period ending 31 March 2024 on the morning of Wednesday 24 April 2024.
Amanda Lacaze, Managing Director and Chief Executive Officer, will host an analyst and shareholder briefing on Wednesday 24 April 2024 at 10am Sydney time. The briefing will be webcast and accessible online at: https://edge.mediaserver.com/mmc/p/cc89s7gv
What's the SP doing?? Hmm above deck of 6 bucks not too bad when its all said and done. Most keen on the 1/4erly advice pending...
Not holding.
Have a very nice weekend.
Kind regards
rcw1
Lynas Rare Earths Limited (“Lynas”) (ASX:LYC, OTC:LYSDY) will announce its quarterly results for the period ending 31 March 2024 on the morning of Wednesday 24 April 2024.
Amanda Lacaze, Managing Director and Chief Executive Officer, will host an analyst and shareholder briefing on Wednesday 24 April 2024 at 10am Sydney time. The briefing will be webcast and accessible online at: https://edge.mediaserver.com/mmc/p/cc89s7gv
What's the SP doing?? Hmm above deck of 6 bucks not too bad when its all said and done. Most keen on the 1/4erly advice pending...
Not holding.
Have a very nice weekend.
Kind regards
rcw1
Good afternoon
So then, what do the analysts think about LYC SP:
Average PT $6.60; Upside from current price (10/04/24) to average PT +10.6%
www.marketindex.com.au
Kind regards
rcw1
So then, what do the analysts think about LYC SP:
Average PT $6.60; Upside from current price (10/04/24) to average PT +10.6%
- Macquarie OUTPERFORM, PT $7.00 (9 Apr)
- JP Morgan NEUTRAL, PT $5.00 (8 Apr)
- Morgan Stanley UNDERWEIGHT, PT $5.00 (2 Apr)
- UBS BUY, PT$6.90 (19 Mar)
- Goldman Sachs BUY, PT $7.40 (5 Mar)
- Bell Potter BUY, PT $7.20 (27 Feb)
- Citi NEUTRAL, PT $6.70 (27 Feb)
- Jefferies BUY, PT $7.60 (6 Feb)
3 ASX rare earths stocks to watch as prices finally show signs of stabilising
Some major brokers are considering the possibility rare earths prices have stabilised, and if so, we review the three main ASX rare earths stocks
www.marketindex.com.au
Kind regards
rcw1
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Momentum improving on weekly chart, strong candle this week. Signs of a swing low (or better)? Might be a trading opportunity but investor mindset would need more imo. Still within its downtrend.
P/E (blended actual last year with broker estimated FY24) still very high at = 45 for a commodity producer. Using last three years ROEs and FY23 Book Value it doesn't look expensive, so guess an investor would need conviction about world demand and R/E prices going forward as well as no company specific issues with having a plant in 'friendly' Malaysia, an untested one in Kalgoorlie and a planned one in Texas to take the plunge? Couple of on market director buys in March. Think I'll wait for a crash and economic gloom. jmo.
Not Held
WEEKLY
P/E (blended actual last year with broker estimated FY24) still very high at = 45 for a commodity producer. Using last three years ROEs and FY23 Book Value it doesn't look expensive, so guess an investor would need conviction about world demand and R/E prices going forward as well as no company specific issues with having a plant in 'friendly' Malaysia, an untested one in Kalgoorlie and a planned one in Texas to take the plunge? Couple of on market director buys in March. Think I'll wait for a crash and economic gloom. jmo.
Not Held
WEEKLY
Hi @finicky
The swing trade was there, for mine. Below deck of 6 bucks always a chance ... rcw1 did not action it. Why? Still watching...
But rest assured will...
LYSCF (US OTC) $3.93 Flat
LYSDY (US ADR) $3.894 Opened $4 / gain 0.0140 (0.36%)
Kind regards
rcw1
Good morning
Has been reported:
Gina Rinehart has emerged as a big shareholder in Lynas Rare Earths after a $49 million spending spree on the resources stock over the past few days.
Mrs Rinehart’s Hancock Prospecting lifted its stake in Lynas, to 5.82 per cent yesterday
Very interesting. Assumptions aplenty …
Kind regards
rcw1
Has been reported:
Gina Rinehart has emerged as a big shareholder in Lynas Rare Earths after a $49 million spending spree on the resources stock over the past few days.
Mrs Rinehart’s Hancock Prospecting lifted its stake in Lynas, to 5.82 per cent yesterday
Very interesting. Assumptions aplenty …
Kind regards
rcw1
Good morning.
Very Interesting indeed. Read it n was gonna ask Row1. Mate, any regrets not holding it? Ooops no declaration that u r not a holder so maybe you do now?
hey Rabbithop, hoping the family is all good, not holding at the moment....
She'll b right bloke.
Kind regards
rcw1
Hope you are recovering from your virus. I am recovering flu in time to take the grandkids for 2 days hotel stay in city this week n next week again. It's a joy to be able spending quality time with them, hearing their laughters etc etc.
JohnDe
La dolce vita
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Sales revenue still dropping.
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Capex decreasing as the Kalgoorlie processing plant nears completion. Malaysia update completed and production increased.
Still stockpiling processed ore while prices remain low. Prices may have hit bottom and have started to rise.
Still stockpiling processed ore while prices remain low. Prices may have hit bottom and have started to rise.
Dona Ferentes
A little bit OC⚡DC
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A,bit of media comment, below .... any merger hasn't happened yet.
.
Earlier this year, Lynas and MP Materials held merger talks that came amid consolidation among state-owned rare earth producers in China, which has threatened to cut off supply to the Western world during flash points in its relationship with the US.
Mrs Lacaze said on Wednesday that Lynas was one of two producers in the world making money at the current low price for rare earths. Lynas estimates China’s Northern Rare Earths is profitable at the current low prices but that every other producer is breaking even or losing money.
Asked about the prospect of consolidation outside of China, including a deal between Lynas and MP, Mrs Lacaze left the door ajar.
“We have talked about the value of having a Western rare earths champion with real critical mass,” she said. “For whatever reasons, as it turned out the time was not quite right, but that doesn’t mean that it won’t be at some stage.”
Lynas and Las Vegas-based MP are the world’s two biggest producers of rare earths outside of China. Both have the backing of the US Department of Defence to build processing plants in Texas to produce rare earth materials essential in modern weapons systems, electronics and in the renewable energy sector.
.
Lynas boss leaves door ajar for rare earths mega-merger
Lynas Rare Earths boss Amanda Lacaze has sung the praises of Gina Rinehart amid speculation about a potential mega-merger in the sector to create a Western world champion to challenge Chinese dominance. Mr Lacaze said Mrs Rinehart was welcome on the Lynas register after pushing her stake to 5.82 per cent this month, hot on the heels of emerging as a big shareholder in New York-listed MP Materials.Earlier this year, Lynas and MP Materials held merger talks that came amid consolidation among state-owned rare earth producers in China, which has threatened to cut off supply to the Western world during flash points in its relationship with the US.
Mrs Lacaze said on Wednesday that Lynas was one of two producers in the world making money at the current low price for rare earths. Lynas estimates China’s Northern Rare Earths is profitable at the current low prices but that every other producer is breaking even or losing money.
Asked about the prospect of consolidation outside of China, including a deal between Lynas and MP, Mrs Lacaze left the door ajar.
“We have talked about the value of having a Western rare earths champion with real critical mass,” she said. “For whatever reasons, as it turned out the time was not quite right, but that doesn’t mean that it won’t be at some stage.”
Lynas and Las Vegas-based MP are the world’s two biggest producers of rare earths outside of China. Both have the backing of the US Department of Defence to build processing plants in Texas to produce rare earth materials essential in modern weapons systems, electronics and in the renewable energy sector.
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