Australia’s Lynas Rare Earths announced that it intends to cease all operations in Malaysia, except for a mixed rare earth carbonate processing plant, in the final quarter of this year. This decision has led to a decline in the company’s shares, which fell by as much as 2.7 percent to A$6.24 (RM18.80) by 0045 GMT, marking their lowest point since May 3.
Lynas’ operations in Malaysia have been a contentious issue for the company, as the Malaysian government has raised concerns about radiation levels resulting from its cracking and leaching activities over the past couple of years. Prime Minister Datuk Seri Anwar Ibrahim has even issued warnings about potentially banning the export of rare earth raw materials.
The company has plans to upgrade its downstream operations in Lynas Malaysia to boost neodymium-praseodymium (NdPr) production to approximately 10,500 tonnes annually. This upgrade is deemed essential if Lynas is to meet the conditions of its Malaysian operating license, which currently prohibits the import and processing of rare earth raw materials starting in January 2024.
During the impending shutdown, scheduled to begin in mid-November for upgrade work completion, key staff from Lynas’ Malaysian cracking and leaching plant will assist in launching the rare-earths processing facility in Kalgoorlie, Western Australia.
Lynas, which had its Malaysian operating license extended until January 2024, noted that its application to allow regular operations in Malaysia while awaiting the outcome of administrative and legal appeals will be heard and decided in November. The company is the largest global producer of rare earths outside of China and reported a 21.8 percent decrease in first-quarter sales revenue to A$128.1 million, falling short of the consensus estimate of A$159 million, according to Barrenjoey.
“The production report looks a little underwhelming and plenty of maintenance issues to come which is not helpful,” said Henry Jennings, senior market analyst at Marcustoday.
NdPr production for the quarter came in at 1,526 rare earth oxide tonnes (REOt), compared with 1,045 REOt a year earlier.