Professional Documents
Culture Documents
March 2010
► This presentation does not constitute, or form part of, an offer to sell or the solicitation of an offer to subscribe for or buy any securities, nor the solicitation of any vote or
approval in any jurisdiction, nor shall there be any sale, issue or transfer of the securities referred to in this presentation in any jurisdiction in contravention of applicable
law. This presentation is not an offer of securities for sale in the United States, nor does this presentation constitute a prospectus or other offering document in the United
States or any other jurisdiction in which it is being used. Securities may not be offered or sold in the United States absent registration under the U.S. Securities Act of
1933, as amended, or an exemption from registration therefrom.
► Lynas Corporation Ltd is making this presentation available solely to persons that are either (A) “qualified institutional buyers” as defined in Rule 144A under the United
States Securities Act of 1933 (the “Securities Act”) or (B) not US persons (as defined in Regulation S under the Securities Act) (“U.S. Person”) that are outside the United
States. Any securities referred to herein have not been registered under the Securities Act, and may not be offered or sold in the United States or to, or for the account
or benefit of, U.S. Persons unless the shares are registered under the Securities Act or an exemption from the registration requirements of the Securities Act is available.
Any offer or sale of securities will be made pursuant to definitive documentation, including an offering memorandum, which describes the terms of the offering and the
selling and transfer restrictions applicable to the offering.
► In providing this presentation, Lynas has not considered the financial position or needs of the recipient. Persons needing advice should consult their stockbroker, bank
manager, solicitor, attorney, accountant or other independent financial and legal advisors. This presentation includes some forward-looking statements. These forward-
looking statements are not historical facts but rather are based on Lynas’ current expectations, estimates and projections about the industry in which Lynas operates,
and beliefs and assumptions regarding Lynas’ future performance. Words such as “scenario”, “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”,
“forecasts” and similar expressions are intended to identify forward-looking statements.
► These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors, some of which are beyond the
control of Lynas, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Lynas
cautions shareholders and prospective shareholders not to place undue reliance on these forward-looking statements, which reflect the view of Lynas only as of the date
of this presentation. The forward-looking statements made in this presentation relate only to events as of the date on which the statements are made. Lynas will not
undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances or unanticipated events
occurring after the date of this presentation except as required by law or by any appropriate regulatory authority.
-2-
Mount Weld will be a major fully integrated source of
Rare Earths supply outside of China
About Lynas Corporation Assets for Integrated Source of Supply
Vision : Be a global leader in Rare Earths
for a sustainable future
Debt : Nil
Advanced Materials Plant – Malaysia
-3-
Rare Earths underpin new materials technology
required to sustain the needs of today’s society
Energy Efficiency Environmental Protection Smaller yet more powerful
through lower consumption through lower emissions digital technology
-4-
Hybrid vehicle technology is dependent upon
Rare Earths
Dysprosium Cerium
Terbium
-5-
Rare Earths are a group of elements with unique
properties
Rare Earth Elements Catalytic Magnetic Electrical Chemical Optical
Lanthanum (La) 9 9 9 9
Cerium (Ce) 9 9 9 9
Praseodymium (Pr) 9 9 9 9
Neodymium (Nd) 9 9 9 9
Samarium (Sm) 9
Europium (Eu) 9
Gadolinium (Gd) 9 9
Terbium (Tb) 9 9
Dysprosium (Dy) 9 9
Holmium (Ho) 9
Erbium (Er) 9
Ytterbium (Yb) 9
Yttrium (Y) 9
-6-
Demand for Rare Earths is driven by the underlying
applications, and China dominates production
2010 Demand Forecast by Application 2010 Demand Forecast by Region
Other, 3%
Phosphors, 11,000t
Ceramics, 1%
6% USA, 8%
Glass Additive,
13,000t
Magnets, 24% Europe, 10%
8%
Asia other, 4%
Polishing 5,000t
Powder, 15%
Battery Alloy,
12%
Japan, 24%
32,000t China, 54%
FCC, 16% Metallurgy ex
battery, 9% 72,000t
Auto Cat, 7%
Source: Japanese Finance Ministry Import Statistics 2007 & 2008, IMCOA and China Rare Earths Information Centre Nov 2008
Note: Totals may not add due to rounding
-8-
Magnets and battery alloy are forecast to be the
growth drivers for Rare Earths demand to 2014
Growth Forecast by Application 2014 Demand by Application
• Others 2% 4,000
Total = 182,000 tonnes
• Total 8% 182,000
Source: Asian Metal, Metal Pages, Lynas research Source: Chinese Government announcements, Asian Metal, Metal Pages
-10-
The Chinese Government is seeking to improve the
environmental impact of production in China
Baotou Tailing Pond
Southern Clay
-11-
As supply tightened in ‘08 prices increased, in ‘09
demand dipped, prices are now recovering
REO
US$/kg Metric Tonnes
US$13.48/kg
Based on Mt Weld Composition, FOB China basis
15.00 185000
14.00 8 Feb 10
13.00 160000
Rare Earths Price Chart
12.00
-12-
Applications use different Rare Earths, the supply
distribution does not match demand distribution
Rare Earths Usage by Application
Application La Ce Pr Nd Sm Eu Gd Tb Dy Y Other
Note: Percentages represent estimated average consumption distribution by application, actual distribution will
vary from manufacturer to manufacturer
-13-
Elemental Pinch Points based on Lynas Demand and
Supply for 2010
Supply vs Demand Supply/Demand imbalance
(REO, separated products) (REO, separated products)
Demand vs. Supply
Mineral scarcity is expected to be an aspect of this industry for at least the next five to ten
years
There are insufficient well advanced new projects in the pipeline
9 Lynas – Mount Weld
9 Molycorp – Mountain Pass
There is significant first mover advantage to be gained by those companies able to supply
-15-
Lynas is the leader among defined Rare Earths
resources under development outside China
Rare Earth Development Projects
Bubble Size Represents Stated Production Volume
$2,500.00
Steenkampskraal
$2,000.00
(US $/ Tonne of Ore, prices Feb '10)
Mt Weld
Insitu REO Value
$1,500.00
$1,000.00
Zandkopsdrift Mountain Pass
Dong Pao
Nechalacho*
$500.00
Kangankunde
Bear Lodge
Hoidas Lake
Nolans Bore*
DZP*
$-
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ea3 4 5 le6 ing e7r 8Eng 9 on up
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i
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JO ourc r e
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a
s
P tw B ee
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eta ppro
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Source: The data for non-Mt Weld deposits is based on public statements by the relevant resource holders except for Dong Pao which
is based on a company interview, and has not been separately verified by Lynas. * Represents a polymetallic resource.
-16-
2014 Elemental Pinch Points – Scenario 1, maximum
China supply plus new resources
2014 Supply Assumptions Supply/Demand imbalance
(REO, separated products) (REO, separated products)
Baotou 60,000t Lanthanum - 10,200t -19%
Limited by iron ore mining
Cerium 9,000t 16%
Sichuan 15,000t
Praseodymium -5,400t -36%
Jiangxi Copper refurbishment
Ionic clay regions 40,000t Neodymium -8,300t -20%
High Eu 30,000t Samarium 3,000t >100%
High Y 10,000t Europium -50t -9%
Mount Weld 22,000t
Gadolinium 1,600t >100%
Mountain Pass 20,000t
Terbium -200t -33%
Others 18,000t
Recycling ~6,000t
Dysprosium -300t -12%
Russia ~ 4,000t Yttrium 3,000t 30%
India ~ 4,000t
Vietnam ~ 4,000t
Total 175,000t
Source: Distribution of Rare Earths resources from IMCOA, demand as per previous charts
-17-
Scenario 2: Reduction of Southern Ionic clay mining
2014 Supply Assumptions Supply/Demand imbalance
(REO, separated products) (REO, separated products)
Baotou 60,000t Lanthanum - 14,900t -27%
Limited by iron ore mining
Cerium 8,700t 16%
Sichuan 15,000t
Praseodymium -6,400t -43%
Jiangxi Copper refurbishment
Ionic clay regions 20,000t Neodymium -12,200t -30%
High Eu 15,000t Samarium 1,900t >100%
High Y 5,000t Europium -160t -30%
Mount Weld 22,000t
Gadolinium 550t 45%
Mountain Pass 20,000t
Terbium -340t -56%
Others 18,000t
Recycling ~6,000t
Dysprosium -1,200 -48%
Russia ~ 4,000t Yttrium -3,100t -32%
India ~ 4,000t
Vietnam ~ 4,000
Total 155,000t
Source: Distribution of Rare Earths resources from IMCOA, demand as per previous charts
-18-
The Lynas strategy is to build a resource base to meet
demand and expand our processing hub in Malaysia
Multiple
Multiplemine
mine
sources for
sources for
concentrate
concentrate
supplies
supplies Mount Weld Malawi *
Industrial
IndustrialInfrastructure
Infrastructure
Chemical Gebeng Industrial Estate
Chemicalindustrial
industrialland
land
Gas, East Coast Malaysia
Gas,Water,
Water,Electricity
Electricity
Re-agents
Re-agentsfrom
fromlocal
localsuppliers
suppliers
Processing Port
Port––container,
container,chemical,
chemical,bulk
bulk
Processing
hub
hubwith
with Knowledge
KnowledgeInfrastructure
Infrastructure
exceptional
exceptional Technical
Technicaland
andtrade
tradeskills
skills
infrastructure Chemical
infrastructure Chemicalindustry
industryexperience
experience
English
Englishlanguage
languageskills
skills
Government
GovernmentInfrastructure
Infrastructure
Accountable
Accountableregulators
regulators
Clear
Clearlegal
legalframeworks
frameworks
FDI
FDIincentives
incentives
* : The Malawi deposit is currently under a purchase agreement, not yet completed
-19-
Mount Weld. located in Western Australia, has good
local infrastructure
-20-
Basic Geology of Mount Weld
-21-
The current mining operation is within the
Central Zone Pit
Central Lanthanide Deposit Sector The Total CLD Sector Mineral Resource
Mount Weld Tenements (2.5% REO cut-off)
-22-
Mount Weld’s Central Zone Pit has a natural
advantage in grade and composition
Mount Weld
US$/kg Baotou Composition
Rare Earth Elements Composition
Feb 2010 By Weight
By Weight
Lanthanum Oxide 25.50% 6.30 25.70%
Cerium Oxide 46.74% 4.60 51.30%
Praseodymium Oxide 5.32% 28.60 5.40%
Neodymium Oxide 18.50% 26.70 15.70%
Samarium Oxide 2.27% 3.40 1.10%
Dysprosium Oxide 0.12% 161.00 0.06%
Europium Oxide 0.44% 510.00 0.18%
Terbium Oxide 0.07% 490.00 0.02%
Mount Weld’s average head grade is 14%, compared to approximately 5% of Baotou China
Mount Weld’s Rare Earth Oxide distribution is worth 20% more per tonne compared to Baotou
Low Thorium, 44ppm ThO2 / 1% REO
-23-
Mount Weld pit floor is currently 51m below surface,
the mine plan pit floor is another 36m down
Southern
Zone Offices
Overburden 773,000t on
stockpiles
8%
13%
17%
26%
15%
13%
21%
20%
Conc.
Top soil Plant
1.5km
-24-
Schematic of Concentration Plant process at
Mount Weld, which has been pilot plant tested
40% REO
-25-
The Concentration Plant is scheduled to commence
operations by the end of 2010
► All Approvals in place
-26-
The Crown Polymetallic Deposit is a world class
niobium asset and contains 475,000t REO
Crown Polymetallic Deposit Total Crown Polymetallic
Mt Weld Tenements Mineral Resource
Crown
Polymetallic Category Indicated Inferred Total
Resource Mt 1.5 36.2 37.7
Ta2O5 0.037% 0.024% 0.024%
Nb2O5 1.4% 1.06% 1.07%
TLnO 1.65% 1.14% 1.16%
ZrO 0.32% 0.3% 0.3%
FeO3 46.5% 42.6% 42.8%
P2O5 8.9% 7.96% 7.99%
Y2O3 0.1% 0.09% 0.09%
Al2O3 9.94% 11.3% 11.3%
TiO 5.8% 3.94% 4.01%
Rare metal mineral resources for ore blocks of positive net value in the Crown and Coors Sectors
(Mt = millions tonnes. TLnO = Total Lanthanides), Resource estimate by Hellman & Schofield
-27-
Lynas has acquired CSBP’s rights within Mt Weld
tenements
-28-
Containers of Rare Earths concentrate will be trucked
to Fremantle for shipping to Malaysia
GEBENG
GEBENG
GEBENG
GEBENG
-29-
Schematic of Advanced Materials Plant core process,
which is mature industry technology
CONCENTRATE
TO SULPHURIC
ACID MIXER
Multiple workshops
of solvent extraction
-30-
LYNAS ADVANCED
Malaysia site construction: Piling for post
MATERIALS
treatmentPLANT
workshop
-31-
The Advanced Materials Plant is scheduled to be
completed in Q2 2011
► Engineering Design to be completed
-32-
Six customer agreements have been signed
Rhodia Supply Contract 6th Customer Agreement – Supply
• >US$200M¹ Contract
• Long term 10 year contract • Long term multiple year contract
• Cerium, Europium, Terbium & • Product from Phase I & Phase II of
Lanthanum final separation and product finishing
plant in Malaysia
-33-
Operational expenses are dominated by reagent and
energy costs
-34-
Summary of estimated capital and operating costs to
fund Phase 1 of the Rare Earths Project
Construction & Other Capital Costs Total A$mm Capex spent to Future capex
date A$mm A$mm
WA Concentration Plant $59.5 $13.9 $45.6
Gebeng Cracker & Separator Plant 233.5 48.5 185.0
Engineering & Project Management Costs 100.0 69.7 30.3
Other Capex including Land at Gebeng 74.1 58.4 15.7
Contingency (approximately 9%) 26.1 0.0 26.1
Total¹ $493.1 $178.6 $302.7
-35-
Lynas – building a stable supply chain for vital raw
materials to a sustainable world
The growth drivers are : China dominates the Funds raised for the
1. More efficient use of market with 95% supply completion of Phase 1,
energy 11,000t REO pa.
2. Reduction of China cannot meet
greenhouse gas growing world demand Construction underway
3. Digitisation with completion due in
Mount Weld is the only Q2 2011
Substitutes are not alternative source to
available for most China under construction Infrastructure and
applications utilities have been
scaled for 22,000t REO
Continuous growth 8%
CAGR is forecast Supply contracts have
been signed
-36-
NOTE
-37-