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My 10cs comment on NTU. The success or failure of the project is...

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goofy

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21/03/18

15:43

Post #: 31922809
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Originally posted by Infose ↑

My 10cs comment on NTU. The success or failure of the project is dependent upon two factors, namely upon the cost of production and the international price of Dy.

Soon we will be knowing what the maximum cost will be. I say maximum because what we are going to have is a small scale plant with all the inefficiencies inherent to its relative small size. This means that if the project goes to the next phase or phases NTU will have the opportunity to reduce future costs by taken advantage of the economies of scale.

As to what concerns the international price for Dy, as somebody said NTU will be a price taker and since China dominates the market to a certain extent such price will be controlled by them. However they have not been given a blank cheque as they too have to operate under some constraints.

First, they are conscious and more importantly in need to do some thing about the externalities that come with the mining of rare-earth minerals. For those that don't know, in economics an externality is the cost or benefit, in this case the cost, that affects a party who did not choose to incur that cost. One obvious externality is the pollution of the environment. This means that some mines currently in operation will have to be closed down and that others will not be allowed to open.

Second, what kills high prices is even higher prices, this because very high prices does spur substitution, the opening of new mines and efficiency gains.

Third, Dy is an exhaustible resource for which there must exist from the economic and strategic point of view an optimal way t0 release that stuff for consumption. The Chinese state can leave the rare-earth materials in the ground indefinitely or extract and accumulate them or sell them right away and then purchase a financial asset with the proceeds, including, gold, Eurobonds, or whatever; or restrict their sale to foreigners in order to force their manufacturing to move to China or do any possible combination of these four things.

What amazes me is that the naysayers do seem to know what lies ahead in terms of all these factors.

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My 10cs comment on NTU. The success or failure of the project is dependent upon two factors, namely upon the cost of production and the international price of Dy.

This is what I find most intriguing, how anyone could invest in NTU without knowing any details of the R&D pilot plant operating costs or what NTU 52% mixed concentrate is worth. I have no doubt that NTU management have some idea but they refuse to divulge that information to the market. Why?

Why are you referring to the international price of Dy? NTU expects to sell a 52% mixed concentrate into China.

Costs aside, any idea what NTU 52% mixed concrete would be worth today?

NTU Price at posting: 8.5¢ Sentiment: Sell Disclosure: Not Held
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