May 17, 2020

One for sorrow, $2.9billion for Joy: Komatsu to buy U.S rival Joy Global

Joy Global
Komatsu
Mining equipment manufacturing
Surface
Dale Benton
1 min
One for sorrow, $2.9billion for Joy: Komatsu to buy U.S rival Joy Global
The Japanese mining equipment manufacturers Komatsu Ltd has entered an agreement to purchase Joy Global Inc, as the company bids to increase its presenc...

The Japanese mining equipment manufacturers Komatsu Ltd has entered an agreement to purchase Joy Global Inc, as the company bids to increase its presence in the mining industry.

Taking into account the Milwaukee based company’s current debts, the deal will be worth $3.7billion in total.

The deal comes at a time when the dollar has fallen 10 percent against the yen this year, encouraging Japanese companies to conduct international deals.

Demand for mining equipment has also fallen, with Komatsu specialising in the production of surface-only mining equipment.

With the declining demand, now is a “good time” for Komatsu to enter the underground mining business.

"The mining market is near the bottom now. Now is the good time (to do the acquisition)," Komatsu Chief Executive Tetsuji Ohashi told reporters.

 "We have solid enough financial soundness to withstand a large scale acquisition."

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Apr 22, 2021

Lynas revenue jumps 21% as rare earth prices jump

Lynas
RareEarth
WindTurbines
electricvehicles
2 min
Lynas Rare Earths sees revenue boost as selling prices for the key metals hit record highs amid strong demand for neodymium and praseodymium (NdPr)

Australian miner Lynas Rare Earths posted a 20.6% rise in revenue in the March quarter as selling prices for the key metals it mines hit record highs amid strong demand, particularly for neodymium and praseodymium (NdPr).

NdPr

NdPr is used in magnets for electric vehicles and windfarms, in consumer goods like smartphones, and in military equipment such as jet engines and missile guidance systems.

The company said it plans to maintain production at 75% however, as it seeks to continue to meet covid-19 safety protocols and grapples with shipping difficulties. Shares in Lynas fell 6.1% after the results.

“They have faced a few logistics issues, and it would be good to know when they are going to start lifting their utilisation rates a bit,” said portfolio manager Andy Forster of Argo Investments in Sydney.

“Pricing has been pretty strong although it may have peeled back a bit recently. I still think the medium, long-term outlook is pretty good for their suite of products.”

Lynas post ed revenue of A$110mn ($85.37mn) for the three months to the end of March, up from A$91.2mn a year earlier as prices soared.

Rare Earths

It said its full product range garnered average selling prices of A$35.5/kg during the March quarter, up from $23.7 in the first half of the financial year. “While the persistence of the covid crisis, especially in Europe, calls for careful forecasts for our business ahead, we see the rare earth market recovering very quickly,” said Lynas, the world’s largest rare earths producer outside China.

Freight demand has spiked during the pandemic, while the blockage of the Suez Canal in March delayed a shipment to April.

Lynas’ output of 4,463 tonnes of rare earth oxide (REO) during the quarter was marginally lower than 4,465 tonnes from a year earlier.

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