Lynas (ASX: LYC) is investing $500m to expand capacity at Mt Weld mine in WA which is host to one of the highest grade rare earth deposits in the world.
The Lynas 2025 growth plan was announced in May 2019, targeting a 50% increase in NdPr production to 10,5000 tonnes per annum by 2025.
“To meet Lynas’ ambition to grow with the market, this previously announced growth plan must be accelerated and increased,” Lynas said in a statement.
The investment will seek to increase feedstock availability from 7,000 to 12,000 tonnes per annum of NdPr, which is typically shipped to Malaysia for downstream processing.
Encouragingly, the investment will be fully funded from cash flow. Previously, Lynas reported $965.6m in cash at the end of the June quarter.
Lynas shares trended higher on the news, up 5.5% to $9.37 in early trade.
The expansion project includes upscaling processing equipment, efficiency improvements, enhanced sustainability and provides a foothold for further capacity increases.
The company expects construction activities to commence in early 2023, with full operation planned for 2024.
In parallel, ongoing mineral resource expansion drilling will seek to uncover the "treasure chest of rare earth element resources" at Mt Weld.
"Having a long life resource is an essential foundation for success in the rare earths market and the recent 1km deep drilling has demonstrated Mt Weld’s potential to supply feedstock for many years into the future," said CEO Amanda Lacaze.
NdPr prices weakened in the June quarter as Chinese lockdowns weighed on industrial output.
Still, Lynas noted that products sold outside of China, "remained very strong during the [June quarter] period."
Finance Writer & Social Media
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