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Old 09-02-2009, 12:36 PM
Sparty Sparty is offline
Join Date: Mar 2009
Posts: 1,145
Default FIRB's Dithering puts LYC Investors on a knife edge.

I am totally convinced that REEs are vital for the new age electron economy technologies' and have outlined some of the issues in and I am invested in LYC and have been for several years... So far this has been a profitable investment.... but there are now some very pressing concerns....

In essence despite LYC having the world's richest REE deposit at Mt Weld, some 6% higher in grade than the USA's much hyped Mountain Pass deposit, LYC has been starved for funds by a disinterested and perhaps lazy Australian investment community.

The resulting lack of funds has led to their quite advanced project being put on care and maintenance and LYC funds are set to run out within weeks.

ON the horizon is a rescue deal by China's CNMMC who are willing to put up around 1/2 billion dollars to progress LYC to a fully fledged producer in return for a 51% stake. And this is where it gets really interesting in a geopolitical sense.

As China has long sought to totally dominate the Rare Earths space and currently controls over 95% of the world's production and has also been very active in acquiring the world's better deposits. Of late China has also increasingly begun to block processed REE exports as she wants the REEs for her own industries. This has caused great alarm in the USA and more recently Japan has become very vocal.

So what will the Australian Foreign Investment Review Board (FIRB) do? They have quite a stark choice that will have to be made within weeks. Do they let LYC go bankrupt or force them to find alternative and most likely onerous funding by denying them the China deal or do they alienate Australia's two biggest trading partners?

And what does this mean for us the early investors?
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china, firb., lyc, lynas corp, ree

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