Heavy rare earth separation facility's design to be completed within FY2021

Asian Metal: Thanks for accepting this interview, Amanda! As the CEO & MD of Lynas Corporation, you are definitely a influential figure in rare earth industry. Would you please introduce your career?

Amanda Lacaze: I joined the Lynas Board in 2014 when Lynas was a start-up seeking to develop Rare Earth processing capability outside China. Today we are the world’s second largest producer of rare earth materials and the only significant producer of separated rare earths outside of China. We have developed a robust business and we have an exciting growth plan through to 2025. Before I joined Lynas, I led a number of company turnarounds and held executive roles across many industries including telecommunications, agriculture and consumer products. The skills I gained in these roles - in marketing, strategy and turnaround management - have been essential in my role as CEO of Lynas.

Asian Metal: A lot of companies halted production in this Q1 and Q2 as a result of the spread of COVID-19, would you like to introduce Lynas' operations over the past months?

Amanda Lacaze: Like many companies, our production was temporarily halted for six weeks since late March in line with the Malaysian government's Movement Control Order. However, we entered the COVID-19 pandemic in robust financial shape as a result of our prudent capital management over a number of years. This meant we could continue to pay all of our employees whether they were working from home, were not rostered on or were unable to attend the workplace. We have a strong safety culture so we were able to quickly implement new health and safety protocols at both of our sites, in Malaysia and Western Australia. We restarted our Malaysian plant in early May at 70% of our Lynas next production rates and increased to 75% of the Lynas next production rates in June. At 75% of Lynas next capacity, we are matching production to market demand and we expect to maintain this rate until COVID-19 uncertainty is resolved.

Asian Metal: I noticed that Lynas has achieved a lot of progress on Kalgoorlie Rare Earth Processing Facility recently. Could you please share these progress and update? What are Lynas' next steps?

Amanda Lacaze: We are very excited about our planned Kalgoorlie Rare Earth Processing Facility which will bring value-added critical minerals processing to Western Australia. The new facility will process rare earth concentrate from Mt Weld to produce a mixed rare earth carbonate that will undergo further processing at Lynas Malaysia. Since we chose Kalgoorlie as the location in December 2019, we have established a dedicated project team, signed a sub-lease for the site and completed environmental studies and front-end engineering design for critical areas. We have placed the order for our kiln which is the most critical long lead item, and subject to approvals, we expect construction to commence in mid-2021.

This month we completed a AUD$425m equity raising which will be used to fund the Kalgoorlie Rare Earth Processing Facility and associated upgrades at the Lynas Malaysia plant. Our strengthened balance sheet will enable our business to mitigate global economic uncertainties and continue to progress with the foundation projects of our Lynas 2025 growth vision. It's our intention to have a residential workforce for the Kalgoorlie Facility and to prioritise local suppliers, so we had meetings with members of the local community and business community in Kalgoorlie to share information and provide opportunities to ask questions about the project. We are very pleased the project has been awarded Major Project status by the Australian government and Lead Agency status by the Government of Western Australia, in recognition of its importance to the Western Australian and Australian economies.

Asian Metal: The global automobile industry picked up slowly since July. Would you please share your opinion about automobile market prospect in the coming months?

Amanda Lacaze: Based on the latest automotive sales data, we are seeing performance vary quite significantly by geography and vehicle type. While the automotive market has been affected by COVID-19, it may take a few quarters to clarify the effects on demand, including the effects of government economic policies. While global sales are down overall, strong growth in European electric vehicle sales means we are now seeing some forecasts that the European electric vehicle market may grow year on year in 2020, suggesting a growing consumer trend towards electric vehicles.

Asian Metal: NdFeB magnet demand from wind power and consumer electronics industries kept strong over the past months in spite of the dim global economy. The demand from automobile industry picked up slowly since July. What's your opinion about NdFeB magnet development prospect?

Amanda: Based on customer feedback, we are expecting the overall magnet demand to recover soon, driven by the acceleration of electric cars market penetration. However, the effect of the COVID-19 crisis has been so significant that we prefer to wait until end of this calendar year prior to confirm long term market trends.

Asian Metal: May I know how do you expect PrNd oxide and mischmetal demand in the coming months?

Amanda Lacaze: In terms of PrNd oxide and mischmetal demand, we continue to see sustained demand from the wind power and consumer electronics industries in the coming months. The demand from segments related to the automotive sectors has improved, which would support PrNd oxide and mischmetal demand.

Asian Metal: As far as I know, Lynas signed MOU with Blue Line Corporation for rare earth separation capacity in U.S. in last May. Could you please share the current update?

Amanda Lacaze: We signed an MOU with Blue Line Corporation in May 2019 and a team of our people have been working together with Blue Line in the U.S. on our plans for a new Heavy Rare Earth separation facility in Hondo, Texas. In July 2020, we signed a contract with the U.S. Department of Defence (DoD). The phase I funding provided by the DoD will allow Lynas and Blue Line Corporation to complete a detailed market and strategy study and complete detailed planning and design work for the construction of a heavy rare earth separation facility. We expect this work will be completed in the 2021 financial year.

Asian Metal: May I know how do you think about the demand outlook for heavy rare earth oxides, such as dysprosium and terbium oxides?

Amanda Lacaze: Manufacturers need heavy rare earths, particularly for future facing technologies such as electric vehicles, and the market dynamics are attractive. We see the development of our heavy rare earth separation capability as an attractive strategic project for our company. Lynas is ideally placed to meet this need as we have the feedstock from our Tier 1 resource at Mt Weld in Western Australia, and we have the expertise and proven track record in Rare Earth separation.

Asian Metal: Thank you very much for your sharing. We wish Lynas a more flourishing future!

Amanda Lacaze: Thank you. it’s a pleasure to join this interview.