Lynas Provides Update on Impending Ban in Malaysia as New NdPr Record is Set

The Mt Weld mine belonging to Lynas is known for having extremely rich rare earth materials, making it one of the most valuable deposits in the world.

During the first quarter of 2023, Lynas Rare Earths achieved unprecedented levels of neodymium-praseodymium (NdPr) production, totaling 1725 tonnes.

During the same quarter of 2022, the enterprise manufactured 1687 metric tons of NdPr, whereas they only produced 1508 metric tons of the rare earth element in the preceding quarter.

Despite the temporary closure of Lynas' processing plant in Malaysia for over 72 hours, due to activities relating to the integration of a mixed rare earth carbonate (MREC), the company still managed to reach a new milestone.

The impressive results were credited to the enhancements in the efficiency of the plant and the absence of any major interruptions caused by external factors.

The amount of total rare earth oxide (TREO) that was produced experienced a decrease of 12% in the March quarter of 2023, going from 4945 tonnes in the previous year to 4348 tonnes. This reduction occurred due to a scarcity of hydrochloric acid suppliers, which in turn affected the production of lanthanum and cerium.

However, it is worth noting that the sales revenue has seen a noticeable uptick, surging from $217.5 million during the December quarter of 2022 to $237.1 million in the last three months. To put things into perspective, the sales revenue has experienced a striking 45 percent surge since the commencement of the 2022-23 financial year (FY23).

According to Lynas' quarterly report, the need for their NdPr product line from clients who are not based in China remained robust throughout the quarter.

Despite a drop in the average selling price, the production of outstanding volumes of NdPr led to a robust sales performance in the quarter.

Lynas had a decrease in their average selling price during the March quarter. The price fell by 21% in comparison to the price they had in the December quarter of 2022. In the March quarter, their average selling price was $48.3/kg. However, in the December quarter of 2022, they had a higher average selling price of $58.4/kg.

The Kalgoorlie rare earths processing facility of the company is nearing the end of its construction phase, with dry commissioning already underway. The facility is expected to commence feed intake later in the current quarter.

The development of the Kalgoorlie factory is vital for preventing Lynas’ issues in Malaysia. They might be required to halt their cracking and leaching operation in Malaysia, but they hope to resolve this problem by utilizing MREC from the Kalgoorlie plant in their downstream processing.

Lynas' CEO Amanda Lacaze stated that they have been preparing for this situation for a while now, and one of their main priorities has been managing their inventory to ensure they can meet the demands of their key clients even during a time of decreased production. This information has been mentioned in previous reports.

Despite the measures taken, in the event that the Lynas Malaysia cracking and leaching plant is ordered to cease operations starting July 1st, 2023, the entire Lynas Malaysia facility will come to a halt in the middle of July until the new MREC feedstock is obtained.

Given the expected completion date for the feed processing at the Kalgoorlie Facility in the fourth quarter of fiscal year 2023, it is anticipated that the initial MREC shipment from Kalgoorlie will arrive at Lynas Malaysia in approximately August 2023.

However, Lacaze confessed that it was still uncertain when the Kalgoorlie plant would actually be commissioned and ramped up, making it a risky and uncertain process. Due to this unpredictability, Lynas has had to adjust its expectations for the project.

We are considering either completely stopping or significantly reducing production at Lynas Malaysia for a minimum of three months. Afterwards, we will gradually increase production as we reach full capacity at the Kalgoorlie rare earth processing facility.

Lynas has submitted a request to review Malaysia's potential ban to MOSTI's Minister who handles Science, Technology, and Innovation. A hearing will be held on April 28th to decide the result of this application.

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