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The financing deal between Japanese trading house Sojitz Corporation, and rare earth mining company Lynas Corp of Australia recently won the approval of the country’s Foreign Investment Review Board. The deal worth $325 million will help develop the Lynas’ Mt. Weld deposit.
By Michael Montgomery—Exclusive to Rare Earth Investing News
Lynas Corporation (ASX:LYC)(PINK:LYSCF) has announced that the Foreign Investment Review Board has approved a deal with Japan’s Sojitz Corporation to fund ongoing operations on their deposit. The financing deal is a $325 million loan, as well as $25 million in new shares in the company. In exchange, Lynas has agreed to supply a minimum of 8,500 tonnes for the next ten years. Previous attempts from Chinese firms looking to fund various operations in Australia have not been approved. The deal seems to be a win for the company has they receive badly needed funding for their Mt. Weld project, as well as a guaranteeing an off-take partner for the next decade.
The company’s Mt. Weld Deposit is a world class deposit, no question about it. The average composition of the element in their deposit has high concentrations of the most in-demand elements in the rare earth group. According to the company, Mt. Weld’s resource contains 46.74 percent cerium, 25.5 percent lanthanum, and 18.5 percent neodymium, followed by praseodymium, samarium, and dysprosium. These ‘light’ rare earths may be of less value currently, but are have a much higher demand worldwide due to their applications. Cerium is mainly used in auto catalysts, flat screen televisions and monitors, as well as an essential ingredient to compact fluorescent light bulbs that are quickly replacing traditional light bulbs because of government regulations worldwide. Neodymium and lanthanum are essential components of hybrid/electric autos, wind turbines, and other high tech goods for their applications in magnets and batteries, respectively.
The company is also developing their processing plant in Malaysia. Lynas’ Advanced Materials Plant (LAMP) is currently being built to process material from their Australian operations. The plant has come under fire from some environmental groups in the region because of the thorium that is a byproduct of rare earth production. This story was covered by Rare Earth Investing News on March, 14. The vertical integration of the company may offset the higher costs of production on the site as compared with industry competitor Molycorp. Great Western Minerals has also vertically integrated their operations with processing facilities in the US and England, however, has yet to start producing on their deposit in South Africa.
Lynas and Molycorp will be the first two major western companies to hit the market with rare earth oxides. Molycorp has already been selling oxides from old tailing on their past producing mine, and hope to be into full production in 2012, producing an estimated 19,500 tonnes of oxides. They have also recently announced that the board of directors approved ‘Phase 2’ on their Mt. Pass deposit, raising production estimates up to “40,000 metric tons of REO equivalent per year,” according to the press release. These two companies are leading the charge for western production of rare earth elements.
Rare Moon Mining News?
The power that rare earth elements have had over the market over the last year has developed some interesting headlines; however, this one may win the ‘most ambitious and/or humorous mining project of the year award.’
In what can be described as another worldly headline, start-up firm Moon Express Inc. or Moon-EX, is looking to send an autonomous vehicle to the moon by 2013, to look for rare earth elements among other minerals for commercial mining. The company has been working with NASA’s Ames Research Lab in Mountain View California to develop the technology needed for their first voyage.