Lynas Rare Earths Kalgoorlie Project: Challenges & Updates

Phase-by-Phase Commissioning Approach

The commissioning process for the Kalgoorlie Rare Earths Processing Facility is being carried out in four distinct phases. During the initial three stages, key production equipment is prepared, tested, and certified for production. In the fourth and final stage, reagents and feedstock are introduced, including the first feed of lanthanide concentrate to the kiln. This stage also involves completing the heat-up process cycle for the kiln.

Challenges Faced and Mitigation Strategies

Two critical path items, the waste gas treatment plant and on-site gas supply, presented early challenges for Lynas. To overcome these challenges, the company implemented several mitigation strategies. One strategy involved operating the site construction team on a 24-hour basis, ensuring continuous progress. Additionally, Lynas adopted a trucked liquefied natural gas (LNG) onsite gas solution to mitigate timing challenges associated with the installation of a gas pipeline by their gas supplier.

Despite the implemented mitigation strategies, Lynas encountered further challenges related to the completion of the waste gas treatment plant and on-site gas supply. One significant challenge was the lack of availability of suitably qualified personnel to fully staff the 24-hour construction activities. Additionally, there were delays in the delivery of equipment required for the finalization of the commissioning process.

Revised Timeline for First Production

Considering these challenges, Lynas now expects the first production of Mixed Rare Earth Carbonate (MREC) from the Kalgoorlie facility to occur in August, rather than the initially projected completion date in June. This revised timeline aligns with the range of ramp-up scenarios considered for the Kalgoorlie Facility.

To facilitate the completion of the Stage 4 commissioning of the circuits at the Kalgoorlie facility, Lynas will utilize rare earth carbonate from its Malaysian operations. This carbonate will be fed into the chemical and wet circuits, including neutralization, filtration, and carbonation circuits, during the commissioning process.

While the waste gas treatment plant and on-site gas supply pose challenges, the commissioning of other productive equipment will continue unimpeded. Major earthworks, including the construction of ponds required for production, are also underway. Additionally, on-site services such as power, water, and laboratory facilities are being finalized. All materials, including concentrate and chemicals required for production, will be received and stored on-site.

Commissioning Progress and Expected Completion

Despite the challenges faced, the overall commissioning process for the Kalgoorlie Rare Earths Processing Facility remains on track for completion by June 30, 2023. The completion of the waste gas treatment plant and on-site gas supply is the primary focus at this stage. Once these critical path items are finalized, the commissioning of other productive equipment will resume.

Lynas Rare Earths’ Shares and Future Outlook

Lynas Rare Earths Ltd continues to be a prominent player in the rare earths industry. The company’s shares are currently valued at $7.35, reflecting investor confidence in its ongoing projects and future prospects. With the Kalgoorlie Rare Earths Processing Facility nearing completion, Lynas is well-positioned to further strengthen its global rare earths supply chain.

Despite this the company has faced challenges related to staffing, equipment delays, and the completion of critical path items. However, the company has implemented mitigation strategies and remains on track to complete the Stage 4 process commissioning by June 30, 2023. The first production of Mixed Rare Earth Carbonate (MREC) from the Kalgoorlie facility is now expected in August. Lynas continues to demonstrate its commitment to the rare earths industry and its role in securing the global supply chain for these critical materials.