Yes, the Halt has been called while they execute a Memorandum of Understanding (MOU) for offtake arrangements @lowway according to the halt request email to the ASX. Always good to lock in offtake arrangements so you can put some numbers around probable future cashflows, particularly with Rare Earths (REEs/REOs). However, it's a super hard sub-sector of the mining sector IMO, and Lynas' history shows just how hard it can be and how long it can take to become profitable.

These days it seems to me that the only Australian REE/REO plants that are going to get funding are those that are heavily backed and/or underwritten by the Australian federal government, which is what has happened recently with Iluka's Eneabba project, with the Fed Gov handing them a $1.65 Billion non-recourse loan, from the Australian Government's $2 billion Critical Minerals Facility.

Talk about picking winners; Iluka securing a $1.65 billion non-recourse loan for the development of the Eneabba rare earths refinery leaves only $0.35 billion (i.e. $350 million) for everybody else, assuming they don't extend the facility beyond $2 Bil. And Eneabba have NOT secured offtake agreements, so who is going to buy their stuff, and are they going to be profitable?

Trav from the Money of Mine podcast crew has some serious doubts about that and suggests that Iluka (ILU) and their mates at Wesfarmers (WES, who have recently begun looking for rare earth deposits themselves on the back of some significant cost blow-outs with their lithium division) have the inside running on the Aust. Fed Gov's secret plan to establish some sort of rare earths reserve or something, that would buy the rare earths from these plants at prices that ensure profitability - partly to break China's stranglehold on rare earths, but also to allow a downstream rare earths processing industry - other than just Lynas - to be viable here in Australia.

Trav's not sure that's something a Government should be doing with taxpayers money, especially when it is going to provide free kicks to small group of select companies, and their investors. All conjecture of course, zero proof, but if Trav's right, and the logic behind his reasoning does appear to stack up...

Eneabba: A $2b Disaster in Waiting? WTF... [09-Dec-2024]