Lynas posts record quarterly revenue despite Covid-10 restrictions

 

The Lynas rare earths processing plant in Kuantan, Pahang, is operating at 75% capacity.

KUALA LUMPUR: Lynas Rare Earths has posted record quarterly revenue despite operating at just 75% capacity at its processing operations in Malaysia, where authorities grapple with a third wave of the virus.

The company has had to negotiate its way through water shortages and can only have 40% of its total workforce on-site at any one time under restrictions imposed across the country by authorities.

Sales revenue hit US$185.9 million in the June quarter, up from US$110 million in the three months to March 30, amid strong demand for rare earths and despite softer prices for neodymium and praseodymium (NdPr).

Lynas said the result reflected users and governments around the world recognising the need to diversify the rare earths supply chain, which was dominated by China.

Lynas, led by Amanda Lacaze, produced 3778 tonnes of rare earths oxide in the quarter, with NdPr output up slightly to 1393 tonnes, despite the restrictions.

“The achievements of our Malaysian team have been absolutely outstanding over the full duration of the pandemic and in the past quarter in particular,” the company said.

“The vigorous third wave of Covid-19 infections in Malaysia has been challenging.”

Lynas said it prevented any workplace transmission through testing anyone who stepped foot on-site and providing worker accommodation close to its Kuantan processing hub to limit worker movement in the community.

“Where our people have been exposed outside of the workplace and are required to quarantine, we have continued to pay and support them,” it said.

Lynas said NdPr prices had come off in the June quarter after big increases at the start of the year. Prices strengthened again during July.

The average China domestic price for NdPr was US$69.90 a kg for the quarter.

Lynas said demand for catalysts from the automotive and the fluid catalytic cracking sectors was back to pre-Covid-19 levels and that it expected demand to remain strong in the near future.

However, the company said it remained alert to the effect the pandemic could have on end-product demand, logistics and industrial supplies.

Lynas is racing the clock under deadlines imposed by the Malaysian government to stop cracking and leaching rare earths at the Kuantan facilities and to find a suitable permanent waste disposal site for more than 500,000 tonnes of low-level radioactive residue.

It is also facing a legal challenge to the conditional extension of its operating licence in 2019 and opposition to its waste storage plans.

It said it continued to talk to “government and regulatory authorities in Malaysia within the constraints presented by the current Covid-19 conditions”.

“In light of ongoing delays, we have prudently identified a second potential site for the PDF (permanent disposal facility) in conjunction with government and regulatory authorities. Site characterisation and studies are already proceeding to enable the regulators to assess and approve the most suitable site,” it said.

Lynas has started work on a new cracking and leaching plant at Kalgoorlie in Western Australia for rare earths from its Mt Weld mine in the state.

Rare earths material from the Kalgoorlie plant will be sent to both Kuantan and a new heavy and light rare earths downstream processing plant that Lynas is planning in Texas. The US plant is also getting funding from the US Department of Defence.

Lynas said it had submitted detailed engineering and design work on the heavy rare earths part of the Texas plant to the US government in the June quarter. - FMT