Lynas Corp. Ltd. may have to build its own chemicals plant in Western Australia or engage former suitor Wesfarmers Ltd. to supply sulfuric acid and other chemicals to be used for its planned cracking and leaching plant in the state, The Australian Financial Review reported Aug. 23.
Lynas' vice president of production Kam Leung said the company would prefer not to build its own dedicated chemicals plant nor a cracking and leaching plant. However, it appears unlikely that Wesfarmers, which was to build one near its chemical production hub in Western Australia as part of its now-rejected takeover offer, would want to do so any longer.
Construction of a cracking and leaching plant within four years is one of the conditions under the company's renewed operating license for its Gebeng rare earths processing plant in Malaysia, which will allow Lynas to remove low-level radioactivity from rare earths material.
Meanwhile, sourcing chemicals from the Glencore PLC's Murrin Murrin nickel-cobalt mine near Mt Weld, one of two sites shortlisted for the cracking and leaching plant, is also improbable because it appears to barely produce enough sulfuric acid for its own operations. The other potential location for the plant is the gold mining hub of Kalgoorlie.
BHP Group's Nickel West in Kalgoorlie is being considered as another potential source, according to the report.
Leung added that bringing chemicals in or producing them locally will be an economic decision, while stressing that the company's preference is to partner with an existing chemical company under its current business model.
Lynas plans to self-fund the cracking and leaching plant and other capital works to enhance annual rare earths production of neodymium and praseodymium in Malaysia to 10,500 tonnes a year by 2025.
