LYC (ASX) News: LYC Get cracking: Lynas scouts for rare earths plant to meet Malaysian demands

Originally posted by RVR ↑

Thanks, I think it’s worth quoting in full:
Lynas flags Malaysian twist on chemical supply
Brad Thompson AFR 29August 1.06pm

Lynas Corporation says two Malaysian companies are interested in building a chemicals plant in Western Australia to support new early stage processing facilities that the rare earths producer expects to cost the best part of $500 million.
Lynas has four years to have a new cracking and leaching plant up and running under strict Malaysian government conditions around its operating licence in that country.

The WA plant, earmarked for either Lynas’ Mount Weld mine near Laverton or the gold mining hub of Kalgoorlie, will remove low level radioactivity from rare earths material before it is sent to the company's $1 billion processing facilities at Kuantan on Malaysia’s east coast for further processing.

Managing director Amanda Lacaze said the cracking and leaching plant would be built with the capacity to process concentrate from third-party sources as a number of new players look to enter the rare earths space where Lynas is the only significant supplier outside China. She said Lynas had a watching brief on emerging rare earths miners in Australia and it was prudent to build the cracking and leaching plant with the capacity to handle material from sources other than Mount Weld.

Lynas is most interested in other monazite deposits but said at this stage it hadn't identified anything more economic than continuing to develop its Mount Weld resource, which has a 25-year plus mine life. Ms Lacaze said Lynas had options for the supply of big volumes of chemicals required in cracking and leaching, including building its own chemicals plant and its existing Malaysian suppliers following it to WA.

The Lynas processing operations at Kuantan currently rely on near neighbours SPCI and MSCI for supply, with SPCI providing big volumes of sulphuric acid and MSCI providing hydrochloric acid and sodium hydroxide. Lynas managing director Amanda Lacaze expects an official call on licence renewal in Malaysia to come within 60 days of September 2.

Ms Lacaze said both of the Malaysian companies were prepared to look at building capacity in WA, where other options for Lynas include striking supply deals with spurned takeover suitor Wesfarmers or BHP through its Nickel West operations, which produce sulphuric acid in Kalgoorlie. “There are local partners potentially available to us and of course our suppliers in Malaysia are quite keen on following us well,” she said.

Ms Lacaze said it would make for an interesting twist on foreign direct investment in Malaysia if the two local suppliers moved to set up shop in WA.
Lynas reported net profit after tax of $80 million in 2018-19, a big jump from $53.1 million in the previous year despite softer prices for neodymium and praseodymium (NdPr).

The result was achieved on the back of record rare earths oxide production of 19,737 tonnes, up from 17,753 tonnes, and despite a drop in revenue to $363.5 million ($374.1 million). The NdPr price has remained soft despite concerns that China may cut supply of ingredients crucial in electronics, electric vehicles and in defence applications to the rest of the world as part of its trade war with the United States.
Ms Lacaze said Lynas had stockpiled about 300 tonnes of NdPr and would reserve production for the current and future needs of its strategic customers.

The company produced 5898 tonnes of NdPr, a key ingredient in permanent magnets, in 2018-19 over the year, up from 5444 tonnes.

Lynas also faces another approvals hurdle in Malaysia after receiving confirmation on August 16 that its operating licence at Kuantan would be renewed for six months.
Malaysia's Department of Environment is yet to approve an increase in lanthanide concentrate processing at Kuantan, which means the company will enter a period of production go-slow leading into December 31. Lynas shut down its processing plant late in 2018 after reaching its processing cap.

The company said it had adopted a new lower production strategy after challenges with restarting the plant last year. Ms Lacaze said Lynas remained hopeful of gaining approval to lift production but in the meantime NdPr production would be similar to 2018.

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"Ms Lacaze said it would make for an interesting twist on foreign direct investment in Malaysia if the two local suppliers moved to set up shop in WA."

I think that is what's known as delicious irony.

This is looking like, if you have to build it, make it worthwhile and build it BIG.

Lynas looking to leverage their decade lead and set up Australia to dominate ROW RE?

Getting MW ore to concentrate @LAMP has been Lynas weakest link in the cost structure, particularly compared to CNRE, really looks like they are planning to address that rather than just duplicate C&L in Oz.

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