Ann: Temporary Halt to Production at Lynas Malaysia Plant, page-2

23 March 2020
TEMPORARY HALT TO PRODUCTION AT LYNAS MALAYSIA PLANT
Lynas Corporation Limited (ASX:LYC, OTC:LYSDY) has temporarily ceased production at its Malaysian plant, in response to the Malaysian government’s recent announcements regarding the escalation of COVID-19 cases and tighter movement controls in Malaysia. The tighter movement controls in Malaysia are currently scheduled to end on 31 March 2020.
As a responsible business, Lynas has taken steps to ensure the health and safety of our people and our communities and we support the government’s actions to control the outbreak. Accordingly, we have initiated a safe temporary shutdown of our plant into care and maintenance mode.
As part of the safe temporary shutdown, we have retained some work-in-progress inventory that will allow us to ramp up quickly upon restart. Mt Weld will continue to operate during this period.
We have taken actions to significantly reduce cash outgoings during the temporary shutdown. We will continue to pay all our staff during this time.
As indicated when we announced our results for the half year ending 31 December 2019, the Lynas Malaysia plant has delivered strong production volumes during the March quarter to date.
We commence this temporary shutdown in a strong cash position and we are able to avoid a significant majority of our costs under this shutdown scenario. The Lynas cash balance on 31 December 2019 was A$111.8 million and Lynas currently expects to achieve positive cash flow from operations during the March quarter, before payment of approximately A$14 million relating to the Permanent Disposal Facility (PDF) project announced on 30 January 2020. This positions us well to quickly resume satisfying our customers’ needs upon restart of the plant.