Lynas Malaysia Expansion Plans Help as U.S. Project Faces Holdup...

Lynas Malaysia Expansion Plans Help as U.S. Project Faces Holdup 30/08/2024 3:20PM By Rhiannon Hoyle A plan by Lynas Rare Earths to start separating two valuable heavy rare earths at its plant in Malaysia, breaking China's stranglehold on the products used to make powerful magnets, eases time pressures on the construction of a similar U.S. facility that has been delayed by a permitting issue, the miner's chief executive said. Lynas, the biggest rare-earths miner outside China, said this week that earthworks previously planned to start in 2024 at the site in Seadrift, Texas, will be delayed until an issue related to wastewater management is resolved, which is unlikely to be this year. Australia-based Lynas in June announced plans to next year start separating heavy rare-earth elements dysprosium and terbium at its plant in Malaysia, where it already separates light rare earths, including neodymium and praseodymium, which are used in magnets as well. China essentially refines all the world's heavy rare earths today. "I think that the ability for us to separate the valuable rare earths in our Malaysian facility, which we will have in place next calendar year, and certainly in quantities which are sufficient to provide reassurance to the USG [U.S. government], basically releases that" sense of time pressure on the Texas project, said Chief Executive Amanda Lacaze. "This idea that the only place you can get your heavies is China will be resolved as a consequence of that investment." Lacaze said it is unclear how long it will take to resolve the permitting issue. Analysts at Macquarie said in a note that they are factoring in a six-month delay to the plant, which Lynas has previously said it aims to start operating between July 2025 and June 2026. "Making a prediction on when the regulators will make their decision is difficult, but six months is as reasonable a timeline as any," Lacaze said. The project is supported by the Defense Department, which has allocated roughly $258 million in grant funding for the initial heavy rare-earths component of the facility. Lynas plans to later expand to produce light rare earths at the site, although Lacaze said that isn't currently the priority given the company already has plenty of capacity producing those products at the Malaysia plant. The Defense Department is expected to contribute about $30 million to that part of the project. Lynas has been grappling with headwinds from low Chinese prices and this week reported a 73% fall in annual net profit. Heavy rare-earths prices have been particularly volatile, it said. A U.S. Commerce Department probe in 2022 found that China's dominant position enabled it to set prices low enough to make production unsustainable for competitors. Lynas intends to start up the planned Texas heavy rare-earths separation plant when it is ready, regardless of prices, Lacaze said. "This is a strategic policy initiative from the U.S. government to support the development of the supply chain," she said. New York-listed MP Materials, which operates the Mountain Pass mine in California, has also been awarded government funding to build new U.S. rare-earths facilities. In February, Lynas said it had held confidential deal talks with MP Materials, but the discussions weren't continuing. It said it would focus on its internal growth plans. Lacaze declined to comment on whether Lynas has held further talks with MP Materials since then. She said there is logic to a potential tie-up between the two companies, which own "the premier deposits" of rare earths in the West. "We are a minerals company and, therefore, the quality of our ore reserves is a critical part of our success," she said. "The opportunity to consolidate these two assets and have a Western champion is strategically appealing. It just didn't happen."