Lynas half-year profit plunges on Malaysia expenses amid weak market
Australian rare earths miner Lynas Corp’s half-year profit plunged nearly 80%, hurt by security bond payment at its Malaysian processing facility along with operational expenses incurred for its mining activities, amid weak market conditions.
Lynas, the largest rare earths producer in the world outside China, on Friday reported profit after tax of A$3.9 million ($2.57 million) for the six months ended Dec. 31, while revenue rose slightly to A$180.1 million. (http://bit.ly/2weLY7G)
The company said it deposited A$11.6 million with Malaysia’s Atomic Energy Licensing Board for operating its $800 million plant in Kuantan.
On Thursday, Malaysia approved a new three-year licence, that allows Lynas to continue processing rare earths at the Kuantan plant, subject to meeting several conditions that the miner expects to meet.
Lynas will have to build a cracking and leaching facility outside Malaysia before July 2023 and have to develop a permanent waste disposal facility within the first year from the date of approval of the licence.
For most of 2019, Lynas got unprecedented attention amid an increased focus on the sector’s supply chain on concerns that China might use its dominant position in rare earths as a tool in the then festering trade war with the United States.
Lynas said the production of Neodymium and Praseodymium, used in magnets, fell more than 10% for the half year to 2,512 tonnes, while Rare Earth Oxide production dropped over 22% to 7,518 tonnes.
($1 = A$1.5161)
(By Aby Jose Koilparambil; Editing by Shounak Dasgupta and Shailesh Kuber)