Lynas hit with cost blowout on rare earths plant
Lynas Rare Earths blames inflationary pressures, approval delays and deadlines imposed by Malaysian authorities for a big cost blowout on a downstream processing plant under construction in Western Australia.
The cost of building the cracking and leaching plant at Kalgoorlie has blown out to $730 million, up from $575 million, as Lynas runs down the clock to have it up and running by December 31.
Amanda Lacaze says the rush to finish the Kalgoorlie plant was a big factor in the cost blowout. Carla Gottgens
Lynas boss Amanda Lacaze cannot guarantee hitting that deadline, but is confident it is within reach.
The company is pursuing legal action in Malaysia aimed at lifting onerous conditions retrospectively applied to its original operating licence for downstream processing at Kuantan of rare earths mined at Mt Weld in WA.
Ms Lacaze said the rush to finish the Kalgoorlie plant was a big factor in the cost blowout, along with delays in the initial approval process.
She said Lynas had been forced to build the plant in a “ridiculously compressed timeframe” and that working around the clock escalated costs on top of the inflationary pressures that have hit other critical minerals projects in Australia.
Lynas posted full-year net profit of $310.7 million, down from $540.8 million, on lower rare earths prices countering higher production. Revenue fell to $739.3 million from $920 million and EBITDA slipped to $377.7 million from $601.2 million.
The profit and earnings numbers were slightly better than consensus.
Lynas, the world’s biggest supplier of rare earths outside of China, is continuing to withhold a portion of supply from the market in response to the plunge in prices for the key ingredient in wind turbines, electronics
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