But the reason we prefer Molycorp is because while the Molycorp cost of production is $2.77/kg, the Lynas cost of rare earth oxide production is $10/kg which suggests that should prices collapse the survivor will be Molycorp instead of Lynas.
Garbage post by MCP pumper both. This doesn't factor in the fact that the MCP refinery is half way around the world in ESTONIA! And operates with Stalin era technology. Also does not factor in the much higher value of the Lynas ore in terms of dollar value per ton of resource--Lynas is far higher value in that category. No, this is just bashing squared by a presumed paid basher working for J.P. Morgan Chase--evidently they want to acquire more Lynas shares but want to pay less. This appears to have been the exact same job in the past--drive down Lynas share price for the bank. IGNORE.
I don't think the cash cost referenced is anything but the final cash costs, after both companies have their final plans operating. It is a bit of a ridiculous post though. Assuming that rare earth prices fell to $9 per kg, and Lynas declared bankruptcy, MCP would not be a beauty queen ... it would be a struggling company with low profits.
The only way to justify EITHER of these companies valuations is if rare earth prices are high. At a $8.77 per kg price, Lynas would indeed be operating at a loss, and MCP could have an operational profit of $220 million, before adminstrative, and maintenance expences. The fact that MCP could break even, at slightly lower prices is not an argument for investment.
But hey, in the event of a rare earth price collapse, Lynas folds first. There might even be a narrow window, where MCP is merely very crappy, while Lynas is completely finished. Like that is something to cheer about!