Lynas’ new US funding as it hits record rare earths output

Australia’s largest producer of critical minerals Lynas Rare Earths has has today signed a follow on contract with the United States (U.S.) Department of Defense (DoD) for the construction of the Heavy Rare Earths component of the company’s Texas facility now under construction.

The contract is an expenditure-based contract under which all of Lynas’ properly allocable construction costs for its US Rare Earths Processing Facility will be reimbursed.

Under the updated contract, a US government contribution of approximately US$258 million is currently allocated to the project – this is an increase from the approximately US$120 million announced in June, 2022.

Managing Director Amanda Lacaze said: “Our Heavy Rare Earths separation plant will be the first of its kind outside China and will help to establish a globally significant, safe and environmentally responsible rare earths supply chain.

“Lynas is the only Lynas Rare Earths commercial scale source of separated rare earths outside of China and our expertise makes us the ideal partner for the DoD as it addresses supply chain vulnerabilities and strengthens national security.”

Lynas has completed the purchase of a 149-acre greenfield site in Seadrift, Texas for its co-located Heavy Rare Earths and Light Rare Earth separation plants as well as potential future growth opportunities such as downstream processing and recycling.

The news of the US funding came as Lynas has recorded its highest ever quarterly production in the period to June 30 of Neodymium and praseodymium (NdPr) used in the production of permanent NdFeB magnets.

Lacaze told investors that the company’s Mt Weld, Western Australia mine producer record quarterly concentrates production, with Lynas producing 1,864 tonnes of NdPr.

While Lynas is building further processing facilities at Kalgoorlie, its Lynas Malaysia operation produces the most valuable NdPr oxide, Ce carbonate, Ce oxide, LaCe carbonate and LaCe oxide, and SEG oxide.

Lacaze said: “We continue to accumulate inventory as we plan for the start up of the Kalgoorlie facility.

“We have secured supply to our key customers and, in the coming months given low market pricing, we will hold additional inventory directly.”

Lacaze said softer demand for NdFeB magnets used in electric motors in Japan and China’s oversupply of La-Ce resulted in lower market prices for the quarter.

However sales revenue was $157.5 million and receipts totaled $188.9 million.

During the quarter Lynas received another reprieve for its threatened Malaysian operating license, receiving a licence variation allowing the Malaysia cracking and leaching plant to continue to operate until 1 January, 2024.

Lacaze said: “We continue to seek review of our Malaysian operating licence conditions on which Lynas made the initial decision to invest in Malaysia and ensure that Lynas is treated fairly and equitably as a foreign direct investor and as a significant employer and contributor to the Mlaaysian economy.”

Environmentalists have questioned and challenged Lynas’s operations over radioactive contamination of waste products.

Final major construction works continued at Kalgoorlie during the quarter with full plant commissioning commenced.

The only major area of works under construction is a waste gas plant.

“The Kalgoorlie team is now targeting first production of mixed rare earth carbonate (MREC) in September 2023.”

Further reading:
Lynas to produce rare earths concentrates in Kalgoorlie from August
Lynas gets reprieve from closure of Malaysian rare earths plant
Browse @AuManufacturing’s coverage of Lynas Rare Earths here.

Picture: Lynas Rare Earths/Malaysia finished product