Lynas seeks virus exemptions in Malaysia

Lynas Corp has applied to Malaysia for an exemption from some coronavirus-led curbs, as its rare earths output slumped.

The Lynas factory in Malaysia. Picture: Bloomberg

Lynas Corp shares closed up on Wednesday after the company said it had applied to the Malaysian government for an exemption from some coronavirus-led curbs, after reduced work levels drove an 18 per cent drop in the miner’s third-quarter rare earths oxides output.

Lynas Malaysian processing facility went into maintenance on March 23, days after Malaysia government first announced restrictions on movement.

Those restrictions have been extended to April 28, but Lynas said it was hopeful it could win “critical industry” status for the operations and return its workforce to the plant as its products are essential to the supply chains of key industries in Malaysia, including medical devices and the oil industry.

The ASX-listed company said there was no fixed timeline for obtaining the approval to resume operations, however.

But despite the production halt Lynas said it remained in a strong position to whether the shutdowns, with $124.6m cash in the back, after issuing invoices worth $91.2m for sales of its rare earths product in the quarter, up from $85.8m in the same period in 2019.

Lynas chief executive Amanda Lacaze said the company was continuing to pay all of its workforce, including those furloughed at its WA mine and Malaysian processing plant, and the company hoped it could quickly restart operations if it wins exemptions from movement restrictions.

The company, which is the world’s largest rare earths producer outside China, produced 4,465 tonnes of rare earths oxides in the quarter ended March 31, compared with 5,444 tonnes last year.

Lynas said prices for its key products had fallen in the period, but it was still seeing strong demand from customers in Japan, Europe and the United States as the company pushes its case as the only reliable source of rare earth products outside of China.

Only 10 per cent of the company’s quarterly separated rare earth sales was realised in China, Lynas said.

Production of Neodymium Praseodymium or NdPr, used to make high-strength permanent magnets found in ventilators, computers and wind turbines, fell 14 per cent to 1,369 tonnes. Demand concerns from the virus crisis have also hit NdPr prices, Lynas said.

Lynas shares closed up 8c to $1.62 on Wednesday.