Lynas secures rare earth feed in Malaysia

Lynas Rare Earths (ASX: LYC; US-OTC: LYSDY), backed by Australian mining magnate Gina Rinehart, has secured additional feedstock for its advanced materials plant in Malaysia, the company says. 

The miner signed a memorandum of understanding (MoU) with Menteri Besar (MB), the strategic investment arm of Malaysia’s Kelantan state government, according to a news release on Friday. The agreement provides a framework to negotiate the supply of mixed rare earth carbonate (MREC) feedstock to Lynas’s advanced materials plant in the city of Kuantan, about 300 km south, once MB’s project starts production.

MB is developing rare earth resources in ionic clays in Kelantan. Lynas’s facility has been producing separated rare earth materials since 2012 using MREC shipped from its Mt Weld mine in Australia.

The MoU “is a significant step for Lynas and the Malaysian rare earths industry, bringing together Lynas Malaysia’s over a decade of rare earths industry expertise, and Kelantan state’s rare earth resources,” Amanda Lacaze, Lynas’ CEO and managing director, said in the release. 

Shares in Lynas Rare Earths gained 2.3% in Sydney to close at A$8.07 apiece on Monday, valuing the company at A$7.55 billion (C$, after a 2.9% gain on Friday. 

Kelantan development

Lynas and MB are to jointly develop the Malaysian rare earths industry in Kelantan, the Australian miner said. The new MoU is non-binding pending definitive agreements, it added. The Lynas Malaysia plant supplies customers in East Asia, the U.S. and Europe.  

“Malaysia’s ionic clay deposits have excellent potential as future feedstocks for Lynas Malaysia, particularly given their high proportion of heavy rare earths which are in demand for future-facing technologies including electric vehicles and electronics,” Lacaze added.

Lynas last month became the world’s first producer of heavy rare earths outside China after producing its batch of dysprosium oxides from the Malaysian facility. The company is also eyeing terbium production as early as this month.