Lynas Rare Earths silent on Kalgoorlie sulphuric acid plans, while decimated profit beats expectations

Lynas Rare Earths’ boss Amanda Lacaze is tight-lipped on the miner’s contingency plans for vital sulphuric acid supply if BHP switches off its Kalgoorlie nickel smelter, instead prodding the government to make a move. If BHP decides to place its struggling Nickel West operations on care and maintenance Lynas will have to find another source for vast volumes of sulphuric acid required at its $780m Kalgoorlie cracking and leaching plant, amid a global shortage for the corrosive chemical and strict import restrictions. Ms Lacaze told analysts BHP’s sulphuric acid was the best option in the region. “When we initially scoped Kalgoorlie ... buying acid from the BHP smelter was by far the most cost effective and also lowest risk (option),” she said. “However ... we were always alert — as were BHP — would not run the smelter for the benefit of our facility. “We’ll work with our supplier to understand what the alternatives are.” The Lynas chief executive instead went on the front foot about government intervention at Nickel West. “I think that governments need to be alert at all times to the fact the minerals industry is an ecosystem,” Ms Lacaze said. “The BHP smelter has been a source of sulphuric acid for Goldfields processing for many years.” Her comments followed the release of Lynas’ half-year results on Monday, headlined by a 74 per cent slide in net profit to $39.5 million, but the fall was less severe than the market had anticipated. Shares in the miner were up 3.2 per cent to $6.02 in early trade, before edging down to finish 1 per cent higher at $5.90. Lynas — the largest rare earths producer outside of China — was stung by a weak market during six months to December 31 as Chinese demand slumped. The company ended the period with a cash balance of $686.1m after investing $347m in the Kalgoorlie and Mt Weld expansion projects. Lynas said the Mt Weld expansion project “remains on track” and process plant works approval was received from the State Government this month, with drilling results to update the size of resource due later in 2024. Earlier this month Lynas confirmed it was in merger discussions with US-listed MP Materials, which would have brought together the two biggest rare earths miners outside of China, but the talks fizzled.