Australian rare earths producer Lynas Corp posted a 50% jump in annual profit on Thursday on record production, and said it is still to decide on a site for a planned heavy rare earths processing plant.
Lynas, the largest rare earths producer outside China, reported net profit of A$80.0 million ($54.0 million) for the year to June 30, up from A$53.1 million a year ago.
The result comes amid an increased focus on the sector’s supply chain due to concerns that China may use its dominant position in rare earths as a tool in its trade war with the United States.
Lynas, which has a processing plant in Malaysia, is developing plans to build a second plant to process heavy rare earths in Texas, but said a final decision on the location had yet to be made.
The U.S. government has been looking to reduce reliance on China, which accounts for more than 80 percent of processing capacity for rare earths, a group of 17 minerals found in military equipment and high-tech consumer electronics.
Chief Executive Amanda Lacaze said the company was open to receiving U.S. government funding, but the final site decision would be based on the best strategic fit.
“What is strategically right for our business is that we establish heavy rare earth separating capability. Do we do it in the U.S. or do we do it elsewhere becomes a separate question,” she told a results briefing.
The U.S. Department of Defense said this week it was in talks with Australia to host a processing plant.
A heavy rare earths processing plant would allow Lynas to produce a wider range of elements, in addition to Neodymium and Praseodymium (NdPr), used in magnets.
Lacaze said Lynas will also announce “soon” the location for a new initial processing site in Western Australia. It is choosing between its Mount Weld mine site and the town of Kalgoorlie.
Malaysia this month renewed Lynas’ operating license for its processing plant, but gave the miner four years to build a plant that will remove low-level radioactivity from the material it ships to the Southeast Asian nation.
Lynas said it produced 5,898 tonnes of NdPr for the year, up from 5,444 tonnes a year earlier. Rare Earth Oxide production came in at 19,737 tonnes, up from 17,753 tonnes.
Lacaze said Lynas may have to scale back production into the end of the year as it was awaiting a licence from Malaysia to increase its concentrate imports, but it still expects to produce the same or slightly more than last year.
Shares rose 1.3 pct to A$2.35, extending a recovery from three-month lows touched last week.
($1 = 1.4806 Australian dollars)
(By Melanie Burton and Nikhil Kurian Nainan; Editing by Grant McCool and Richard Pullin)