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Old 09-29-2014, 08:55 AM
Sparty Sparty is offline
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Default Is there a case for Lynas?

It should be remembered that Lynas was tipped into trouble by a well focused social media campaign that on the face of it originated in Malaysia. If Lynas had reacted earlier and with care much of the damage would have likely been averted. But the then CEO Nick Curtis had according to on of the world's foremost rare earth experts Jack Lifton, a "tin ear" and didn't respond adequately and then faced several legal actions and many street demonstrations. The result of this was a marked loss of investor confidence. I remember at the Sydney strategic metals and rare earths conference in 2011 a banker summing up Lynas as being constantly "only one law suit away" from its demise. This sentiment took a huge toll on Lynas' share price and then China dropped its export prices for the L-REEs and left Lynas with a diminished cash flow......

I would argue rather than Lynas having a poor business model as is being posited by the Business Spectator and the Motley Fool Lynas actually has quite a few good things going for it: Including the world's richest L-REE deposit at Mt Weld, a functioning processing plant and and a now fully licensed refinery capable of supplying separated metals. And importantly under new leadership Lynas has or is healing the social rift in Malaysia and seems to be now paying close attention to Malaysian social media....

There is only one other company at this stage of being able to supply bulk refined REE metals ex-China and that is Molycorp in the USA. Molycorp has also had to jump the bar of fund raising recently which it did successfully despite not having quite as good a story as Lynas.

If the world is going to continue to shift away from a carbon based to an electron based economy then Lynas or whoever manages to buy it if it goes under will have a great future. Game on!

You can read about Australian Rare Earth companies here at www.australianrareearths.com
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