14/10/2020 - 13:00

Lynas calls for rare earth support

14/10/2020 - 13:00

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Labour costs make the construction of downstream processing plants a challenge in Australia.

High costs remain a threat to mineral processing in Australia with a new rare earth plant being built near Kalgoorlie the latest example of a project feeling the squeeze.

Kam Leung, vice-president of upstream processing with Lynas Corporation, told the Diggers & Dealers forum government assistance in relocating part of the rare earth process from Malaysia to WA was appreciated.

But there remained the challenge of labour costs being up to four times higher than overseas and with water costs 10 times higher.

Lynas is the biggest rare earth producer outside China with its mine at Mt Weld north of Kalgoorlie, but with most processing currently undertaken in Malaysia.

The shift to early-stage processing in WA follows criticism of the Malaysian plant by environmental activists concerned about some waste material being mildly radioactive.

The $500 million early-stage ‘cracking and leaching’ plant in WA is seen as a first step in the state becoming a world-class supplier of rare earths, which are used in a wide variety of modern technologies.

However, Mr Leung said Australian governments could do more to support those operations in the form of grants and subsidies so they could compete on cost with international producers.

“Our cost of labour is what two, three, four times higher than it is elsewhere,” he said.

“We’re going to pay ten times as much for water compared with what we would pay in Malaysia.

“For a downstream industry you need to be cost competitive, so we are going to be looking for things that put us on a level playing field [with international producers], we’re not asking for anything more than that.”

Mr Leung said Lynas could be in line for grants to develop a major critical minerals project in Texas with the US Department of Defense, which is seeking to reduce its exposure to production from China amid a hardening in Sino-American trade relations.

While the project has major project status with the state and federal governments, he said more support would be welcome to reduce costs at the plant, which would to employ about 100 long-term staff once operational.

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