(This is an excerpt from an article I originally published on Seeking Alpha July 5, 2011. Click here to read the entire piece.)
On June 29, 2011, the New York Times ran a story called “The Fear of a Toxic Return” that provided lurid accusations of environmental mismanagement at the Malaysian rare earth refinery owned by Australian company Lynas Corporation Limited (LYSCF.PK) called the Lynas Advanced Materials Plant (LAMP)…
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Although Lynas management got the opportunity to thoroughly refute the claims in the article, Lynas still felt compelled to respond quickly to the NY Times article with its won official press release…
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Fortunately for Curtis and Lynas, some locals have already tried to engage on their behalf. For example, see “More Than 100 Rally In Support Of Lynas Project” from May 30, 2011.
In the June 23rd article, Curtis goes on to plead with everyone involved to focus on facts rather than emotions and politics…
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The Lynas experience is a sobering reminder of one of the many challenges facing companies that are rushing to produce rare earth elements and associated refined products. All these companies face various degrees of technical, financial, regulatory, and political challenges. Becoming a viable rare earth company is no simple task.
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Molycorp (MCP) moved in the opposite direction, gaining 7% on the heels of Lynas’s woes…
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Chart created using TeleChart
I think as Lynas works to resolve its issues in Malaysia, this entire episode will deliver new premiums for REE companies that are succeeding at hitting key milestones. Assuming Lynas will eventually overcome over its current roadblocks, it should also re-experience more upward momentum in due time.
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha July 5, 2011. Click here to read the entire piece.)
Full disclosure: net long MCP