Lynas may shift processing to Australia to win US tender
Lynas boss Amanda Lacaze has flagged the possibility the company may move more of its processing capacity to Australia.
Lynas boss Amanda Lacaze has flagged the possibility the company may move more of its processing capacity to Australia as it looks to win a tender for the supply of rare earths to the US defence establishment.
Moves are already under way for Lynas to move early stage “cracking and leaching” processing in of its rare earth ore to a new plant outside Kalgoorlie in Western Australia, after the company was ordered to move the work from Malaysia within four years as a condition on its latest operation licence.
But Ms Lacaze told analysts on the company’s quarterly production call on Friday it could expand its Australian processing capability to include some solvent extraction in Kalgoorlie, enabling it to ship a dry product to Malaysia for finishing work.
“It is primarily an operating decision on what is the most efficient point for us to have a transport step. So that may mean that we are better off with the solvent extraction upstream in Kalgoorlie and then the solid conversion before we sent that to Malaysia for downstream processing and product finishing,” she said.
Lynas has submitted a tender to the US Department of Defence to build a rare earth separation plant in the US, to help supply its defence establishment with heavy rare earth products — critical ingredients in high performance magnets, missile systems and other hi-tech equipment.
Ms Lacaze said that, although Lynas was reluctant to shut down any part of its operations in Malaysia, moving more of the company’s processing to WA may make sense if it was to supply product to a US processing facility as well as its Malaysian plant — where the company still faces legal challenges to its operating licence.
She said the shift, if it was made, would also help in “diversifying our industrial footprint”.
Lynas’s push into rare earths production for US customers may also be timely, with the company flagging a glut of concentrate containing light rare earths flooding the Chinese processing market from the US and Africa.
Lynas’s quarterly revenue fell compared to the September period, down 13 per cent to $85.8m, with production restrictions in Malaysia offsetting higher average prices in the period.
It said the better pricing of $25.50 a kilogram across its basket of products, compared to $23.70/kg in the September period, was driven by its mixed heavy rare earth product and its lanthanum and cerium products.
Lynas shares closed up 2c to $2.36 on Friday.