to Malaysia by large ship, then from Malaysia to the contractees?
What a logistical nightmare with storms, unforseen crew challenges, perhaps even running aground with a unseasoned captain. Sure would have been better to have produced ALL OF THE ORE from the "Richest Rare Earth Mine in the World" right there in Australia then sent it by truck to the coast and had the contractees pay for shipping of it back to their home ports....
But good planning is the difference between $0.68 pps of Lynas and Moly's $7.24. Oh well, I guess investors at Lynas will have to be content with spending much of their profits from sales on logistics.
Have I mentioned that NC is a banker and not a miner?
Lynas built in Malaysia because of economic reasons, just like the TIN ore from Australia, imported and shipped all the way to MSC (Malaysian Smelting Corporation) in Penang for refining.
REE ore was and to some extent is still being shipped all the way from Australia and China to the 40 year old REE plant in La Rochelle in France for refining.
In Western Australia, the labour cost is very high.
For instance, a CLEANER IN WESTERN AUSTRALIA IS PAID THE MALAYSIAN EQUIVALENT OF RM 150,000 PER YEAR AND A TECHNICIAN WELL OVER RM 300,000 !
Easy access to cheap water, low gas price, near to suppliers of Sulphuric acids and other chemicals, next to a first class port and a 12 year tax break are also factors which persuaded Lynas to build their plant in Gebeng
1. Chemical Engineer : Malaysia = RM 10,000/month
Australia = RM 40,000/month
Malaysia = RM 0.84/ cu m
Australia = RM 6.00/cu m
3. Electricity :
Malaysia=RM 0.23 /kWh
Australia=RM 0.96 /kWh
4. Caustic Soda
Malaysia = RM 500/ton
Australia = RM 1,500/ton
All in all, the cost of shipping the ore to Malaysia constitute only a fraction of the total cost of production (COP).
Very little. Use Google for the facts and do the math. Say they need ore for 10,000 tons of RE and the concentrate is 20% RE (it is higher). That means they have to ship 50,000 tons of concentrate (double bagged). A cubic meter of dry sand weighs about 1.6 mt. At that density it would be about 30,000 cubic meters and 50,000 tons to ship.
A standard 40 foot shipping container is 40x8x8.5, holding 2360 cubic feet, 66.8 cubic meters, and can carry 30.5 tons. A flat rack container can carry about 45 tons. If they used the closed standard 40-ft container they would put 30.5 tons in it, and it would be largely empty volume. So say they ship in 40 foot open rack cargo containers and using trucks off the seas. Call it 1,000 cargo racks per year.
I'm not going to look up shipping rates from Australia to Malaysia, but I can guess that it might run $1000 to $5000 depending on the price of fuel (probably currently between $1000 and $2000). So that means $2 million fo shipping per year.
Now if the concentrate is higher in RE's, then the cost goes down. If the transportation to the LAMP has any load limits, then they have to distribute the load across more trucks, and more containers and the cost goes up. If they use a non-standard cargo container, and rail, they can possibly gain efficiency.
The shipping to customers is a customer cost issue. Generally businesses like to sell "FOB", freight on board, which means that the business delivers to the loading dock, and the shipper picks it up (Fed Ex, UPS, Mail-Asia). You pay the price at the loading dock plus the cost of your shipping. But again, the cost is a small part and is less consequential. Say you want 10 tons of cerium oxide. That is less than a shipping container, so it will be a few $1000 to anywhere in the world (on the slow boat schedule .... You will pay more for speed). Say each ton of Cerium Oxide costs $10,000. So the order is a $100,000 order with a $2000 shipping cost.
I will point out the Lynas always presented it that producing in Malaysia was advantageous because of the lower shipping costs to Asian customers. But they must ship the RE concentrate, which is inherently more shipping volume than if they purified the RE's in Australia, and then shipped the RE's to a Malaysian warehouse. Instead of shipping the 50,000 tons of concentrate, they would ship 10,000 tons of RE's.
I hated that this was repeated as though it explained the choice of Malaysia. No doubt there were economic advantages or another site would have been chosen. But shipping was not one. And since they have also claimed that there is no hazardous waste produced from processing the Mt Weld ore (even their offal does not stink), there is no environmental advantage.
Must be the taxes, or the cheap labor.
You need mental help, Vern. Nick is out, so blame the losses you took on yourself. You made the investment, no one forced you to, and no one forced you to sell at a big loss. Your pathetic attempts to undermine Lynas cant work. Your friends lost the election in Malaysia. The Lynas plant will not be shut down by the gov't. IT IS producing rare earths, the expansion is set to come on line, and it is just killing you. So be it.
WOW $2.00 a share I should buy now!!!??? Lets see to support SP of $2.00 they should be making a min of $0.05 a Q. With two billion shares that is $100,000,000 a Q. Could you please share what you used for COGS, Sales Price and Volume to come up with this estimate.
For Q3 I use cogs of $25.00/ Kg sell price of $20/KG and come up with big loses no mater what the volume.