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Highlights:
- Following the broader market movement, share price of Lynas gained 1.63% on Friday.
- Recently, Lynas has announced an AU$500 million Mt Weld expansion project to meet the growing demand for rare earths.
- The company expects to commence construction by 2023 with full operations beginning in 2024.
Rare Earths production company, Lynas Rare Earths Limited (ASX:LYC) has been making headlines lately. On 3 August 2022, Lynas announced a circa AU$500 million project to increase the capacity at the concentration plant and Mt Weld mine.
The company has introduced this AU$500 million project to address the increasing demand for rare earths materials.
At 12:08 PM AEST, shares of Lynas were spotted trading 1.63% up from its previous close to AU$9.36 per share. Meanwhile, ASX 200 Materials (INDEXASX:XMJ) was 1.41% up.
Increased demand for rare earths materials
Lynas said that the global demand for NdFeB magnets and rare earth materials is increasing continuously. With the growth in wind energy and electric vehicles, the need for NdFeB magnets is expected to increase to 265,000 tonnes in 2030. Reportedly, in 2020, 13,000 tonnes of NdFeB magnets were consumed.
In May 2019, Lynas shared its 2025 growth plan. As a part of the growth plan, the company targeted to increase the NdPr production by 50% to 10,500 tonnes annually by 2025. It includes development at the Mt Weld ore body along with the beneficiation circuit.
The company must accelerate its growth plan to meet the increasing demand, said Lynas in a statement.
Increasing capacity at Mt Weld
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Image source: © Ipopba | Megapixl.com
Mt Weld is one of the premier rare earth deposits with high-grade long-life resources, and capacity expansion at the mine is a brownfield project.
For expanding Mt Weld, the company targets increasing feedstock production capacity to 12,00 tonnes per annum NdPr equivalent. The company would invest AU$500 million through its cash flow.
The Mt Weld capacity expansion project includes improving efficiency, enhancing sustainability, and upscaling processing equipment and would offer a platform for increasing the capacity further.
As per the ASX announcement, the company has commenced the procurement of long lead equipment items. After gaining the required shareholders and regulatory approvals, the construction is estimated to begin in early 2023. Full operations are expected to commence in 2024.
The company would buy some infrastructure online in stages to accelerate production growth.
Reportedly, the Mt Weld expansion would take care of the environmental impact. In line with this, the company has completed ‘comprehensive environmental flora and fauna and cultural heritage surveys.’ In addition to this, the company would support the environmental approval process.
On the development, Amanda Lacaze, managing director and CEO, Lynas, commented that the main aim of the Mt Weld capacity expansion project is to unlock the true value of the mine sustainably and efficiently by 2025 and beyond.
