Lynas outlines $500m growth plan
Lynas has been halted after the ASX asked for an explanation of details unveiled at its investor day.
Rare earths producer Lynas Corp has entered a trading pause this afternoon pending an announcement to the market responding to the ASX’s request for clarification of the information presented in a slide at its investor day today.
Shares in the takeover target had earlier surged to a six-month high after it unveiled plans to spend $500m to roughly double the production of its main rare earths products to feed a forecast rise in demand and set up an initial processing facility in Western Australia.
In an investor day presentation, the rare earths miner said it is planning to spend $500 million expanding operations to build up its processing facilities and increase production of neodymium and praseodymium to 10,500 tonnes a year. In the year through June 2018, Lynas produced 5,444 tonnes of those commodities.
Lynas said it will need “a larger business to meet forecast demand growth,” estimating global demand for its main commodities will accelerate from 2021 as demand for products such as electric vehicles rises.
The company, which has rebuffed a $1.5 billion, $2.25-a-share proposal from Wesfarmers, also said it sees “new opportunities” for another commodity, cerium, that could increase its sales value by 10 times today’s rates.
The growth plans were released a day after Lynas announced a joint venture with Texas-based Blue Line Corp, aimed at developing a new rare earths separation plant in the US.
Dow Jones Newswires
