Kalgoorlie...

I just returned from Kalgoorlie after an amazing tour of the new, work in progress, Lynas cracking and leaching facility just west of the city. Like many other LYC investors, I have been following the construction progress through presentations and other various news sources and I must admit that the pictures only tell part of the story. To that end I thought I would take a few minutes to relay some of the facts and progress surrounding this fascinating and developing story…

As I departed Perth Airport on the short flight to Kalgoorlie it was pretty clear that mining in the goldfields is alive and well as the Perth airport was literally filled with commuting personnel on their way to Kalgoorlie along with other mines and processing sites within the state. It was pretty easy to tell by the requisite yellow uniform that 70% of the passengers at the Kalgoorlie airport were employed in the mining industry. Kalgoorlie bills itself as the gateway to the goldfields and it absolutely lives up to this moniker. The choice of locating in a mining town provides Lynas with easy access to many different mining services and equipment needed in the course of this project…

Prior to shipment to the C&L plant in Kalgoorlie the ore is mined at Mt. Weld and is put through a floatation process where the ore is crushed, ground and transformed into a slurry. Next, air is injected at the bottom of a slurry tank with the resulting bubbles (containing the rare earths) rising to the surface. These bubbles are skimmed from the surface, dried and bagged for shipment to Kalgoorlie. The percentage of total rare earth in this concentrate is around 33% upon arrival at the Kalgoorlie site…

C&L is currently performed at the LAMP utilizing four kilns. The Kalgoorlie C&L process is basically the same process that is used in Malaysia however there are many new twists and improvements that set Kalgoorlie apart…

The primary function of the Kalgoorlie facility is to provide front end cracking and leaching (C&L) of the concentrate shipped by rail to the Kalgoorlie facility directly from Mt. Weld. Simply stated, C&L is a process that utilizes cracking and chemical extraction (leaching) from the bags of preprocessed material sent to Kalgoorlie from the Mt Weld mine…

When I arrived at the Lynas facility, I was hosted by Grant McAuliffe who is the project director for the Kalgoorlie site. Grant began his tenure with Lynas at the LAMP in Malaysia as the first full time, permanent westerner in site operations back in August of 2013. Grant started in C&L and finishing as the General Manager for the entire LAMP. It was Grant who shared the vision for much of the Kalgoorlie project and the processes and much of the equipment design were developed in house at Lynas, the result of the significant IP developed over years of improving of improving the reliability and efficiency of the Malaysian plant.

Much of the equipment is a third or fourth generation design with the previous generations all being designed, trialed and tested at the LAMP. The intellectual property and the experience gained over the years clearly gives Lynas a competitive edge in the execution of this project…

Grant is a good example of Amanda’s policy and philosophy of retaining and utilizing the talent that makes Lynas successful. I have mentioned before that during the slowdown in the Covid days, Amanda realized it was much more practical to avoid layoffs instead putting everyone to work making the existing processes more efficient. That philosophy paid off in spades as key personnel along with the experience and IP created by these employees remains in the LYC domain, something that is evident in every direction as one visits the site…

Water is a valuable resource in Kalgoorlie and Lynas has developed an unusual solution to this problem. Grant explained that the potable water used by the city of Kalgoorlie is actually piped 600 kilometers across the outback, starting in Perth. After the potable water is used by the consumer in Kalgoorlie it becomes grey water which is normally discarded or used to water lawns after a single use. Instead, Lynas is using this discarded water by employing a system of salt reduction, filters, water softening and reverse osmosis (RO) effectively allowing the reuse of the water about 4 or 5 additional times…

The heart of the C&L plant is the massive kiln that has been installed and has been already been rotated under its own power. In fact, the throughput of the single kiln is greater that the 4 kilns already in operation in Malaysia. Once again, the actual throughput of the kiln is proprietary however one would think that with actual operation, more tweaks will increase the efficiency with time. It is impressive to look at the kiln realizing that a large percentage of the global rare earth supply will be processed at this site…

The bottom line is that the total output of rare earths is directly proportional to the quantity of ore going into the system and that all of the ore must go through the cracking and leaching process. At this time there are no viable shortcuts to the cracking and leaching process which puts Lynas far ahead of the rest of the industry in terms of actual production…

As an electrical engineer I am very interested in process control systems used at the C&L plant and currently the focus is to develop and prewire the buildings that serve as the basic electrical infrastructure for the plant. These electrical distribution systems utilize several modular units about the size of a mobile home which are prewired off site and moved into location to be interfaced with the processing systems on site. For those engineers who are interested in such things, Lynas is utilizing Allen Bradley controllers as the control systems platform…

Another critical part of this process is the development of metal alloys to mitigate the effects of the harsh environment on exposed metal surfaces. Grants knowledge of metallurgy is amazing (he is a metallurgist) and he described the challenges of finding materials necessary to operate in this harsh processing environment. The combination of acid, heat and friction result in erosion and corrosion in the metals used in much of the hardware...

At the end of the day, I must readily admit that I was quite impressed with both the operation and progress at the C&L facility in Kalgoorlie. It is clear that the planning and execution of that plan has been well thought out, exemplified by progress on virtually every facet of this project. The folks at Lynas have clearly identified, planned and are executing a system that will provide cracking and leaching on a large scale. It should be noted that there is currently no plan to construct a separation facility at Kalgoorlie but one can assume that flexibility has been incorporated in the master plan for possible future development…

With any project this size there are sure to be minor delays and problems, after all we are not making Barbie dolls. Those who have commissioned large electro/mechanical/chemical installations understand that these challenges are part of the process. Also, this new facility does not have a master switch to start the entire operation at once, commissioning will give way to a process that continuously evaluates and refines the operation for maximum efficiency...

Lynas continues to define the rare earth industry utilizing the many proprietary processes developed over the years of operating the LAMP. While it is important to maintain secrecy with both experience and intellectual property it is also quite clear that the barriers of entry to the rare earth industry will make it exceedingly difficult for new prospective players to enter the game easily if at all…

The bottom line is that Lynas continues to be the ROW leader in western rare earth separation and processing. While political events present unforeseen challenges it seems like Lynas has not been deterred by these difficult distractions. Perhaps a successful C&L facility in Kalgoorlie will illustrate to the rest of the world that Lynas is indeed the leader in this nascent technology….