Lynas plays coy on mergers and acquisitions as Brazil threat looms

Lynas boss Amanda Lacaze at Diggers and Dealers Mining Forum. Picture: Supplied

Lynas boss Amanda Lacaze says the group is looking at acquisition opportunities, with questions over how the $6.6bn Australian rare earth producer will defend itself from threats from the promising Brazil rare earths market.

However, she would not elaborate on where the group’s focus was while speaking at the Diggers and Dealers Conference in Kalgoorlie on buyout opportunities, adding that the company was looking at a number of prospects.

She told reporters at the conference that more than a month ago, Lynas had received approaches, when asked whether the company had received any inbound buyout offers, but would not comment on where these approaches had come from.

Yet in a confusing situation, a Lynas media spokesperson after the press conference told DataRoom that Ms Lacaze had misunderstood the question and that there had not been takeover interest in Lynas.

She also did not elaborate on what geographies that were a key interest for Lynas when it came to potential buyouts of its own.

It comes amid speculation in the market that Lynas is under pressure to consolidate to defend its market position at a time that Brazil threatens to be a major force in the rare earths market.

Her comments also come at a time that the company is being closely watched for any potential cost overruns at its Kalgoorlie project, which the company has previously said was on budget, dismissing suggestions otherwise.

Amanda Lacaze says Lynas has dealt with ‘every challenge’ that has come its way. Picture: John Feder

One potential target for the company, say sources, could be the $437m Australian listed exploration company Meteoric Resources, which explores mineral tenements in Brazil and Western Australia.

Ms Lacaze has been in the top job for about nine years, with some calling into question whether her position at the helm of the $6.6bn Australian listed rare earths producer was near its end.

The company, previously subject to a $1.5bn buyout proposal from Wesfarmers in 2019, has capitalised on strong rare earth prices over several years, despite a fall in prices due to China market influence.

It has the Mount Weld mine, south of Laverton in Western Australia’s north eastern goldfields, which continues to produce a range of ore types, with high grades of rare earth oxides (REO) ranging in grades from 24 per cent to 45 per cent.

Medium grades are in the range of 16 per cent to 24 per cent and the mine cut-off grade is 4 per cent, with exploration within and near the mine continuing.

The Lynas Kalgoorlie processing facility on the western entrance to the city was now in the commissioning stage, with the waste treatment site the only required completion.

The first delivery of concentrates is on site and when processed the upgraded material will go to the Lynas Malaysian plant where a second production facility has been developed.

A new plant in the US once operating would also take the Kalgoorlie plant’s material from Mt Weld.

In June quarter, there was record production at Mt Weld, where a new government grant of $20m was supporting building of a new plant.

“We’ve been in production for a decade and have faced every type of challenge that could be thrown at us,” Ms Lacaze said.

The company’s share price is at $7.04 in afternoon AEST trade, after peaking in February at $9.70.