Rare earths producer Lynas Corp has admitted publicly to issues that have arisen with our US ally over the company’s Malaysian processing plant.
The Perth company, the biggest supplier of the critical minerals outside China, mines rare earths at Mt Weld in Western Australia and operates a controversial processing plant in Malaysia.
The plant has attracted criticism in Malaysia for its production of radioactive waste, inviting stoppages to production and a demand from Malaysia that it cease importing radioactive ores.
Its problems were complicated by the nationwide shutdown of industry ordered by the Malaysian administration to stem the spread of Covid-19.
While Lynas has decided to move some processing back to Australia to a new plant at Kalgoorlie, Malaysia will remain a vital link in its production chain.
Now that link threatens Lynas’ chances of being awarded lucrative US government support to build a heavy rare earths processing plant in Texas.
Lynas and US company MP Minerals were awarded phase one contracts by the US Department of Defence to prepare competing designs for the plant, with one to be selected and partly funded by the government.
Lynas told investors: “Lynas has…seen media reports in the US of political debate on the merits of supply from the US, supply from US allies, and supply from other sources.
“Lynas remains one of two companies selected…however Lynas understands that the US government’s progress on Phase one is currently on hold while these political issues are addressed.”
While Lynas remains committed to a heavy rare earths separation facility, serious questions are being asked in the US abut the wisdom of being reliant on a company that has a Malaysian supply chain.
A group of senators, led by former Presidential candidate Ted Cruz, warned the Department of Defence it shouldn’t do deals with companies that have supply chains in any country that “presents a risk of supply disruption”, according to Channel 9 media.
The group also wants the military to favour US sources and US facilities.
As admitted by Lynas, its progress in the US is now on hold.
The US and Australia have a partnership to develop critical mineral assets such as rare earths.
Picture: Lynas Corporation
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