Lynas Rare Earths’ ambitions of building a new plant in Texas have been all but scrapped after failing to advance talks with the Trump administration and separate permit issues.
After nearly a year of speculation as to whether project Seadraft would go ahead, the listed miner’s chair John Humphrey told shareholders at its annual meeting on Wednesday it was “unlikely the proposed facility will proceed”.
Lynas’ change in tone regarding Seadrift comes after months of trying to negotiate with the US Government — which has been subject to mass budget cuts — to strike a deal to cover cost overruns involved with the proposed build.
The United States Department of Defence had committed $US288 million ($443m) to develop the site with an initial view the construction of the heavy and light rare earth separation plants would be finished by mid-2026.
As revealed by The West Australian last year Lynas had been yet to move on key approvals to develop the south Texas site first acquired in 2023 after encountering a “permitting issue . . . related to wastewater management.”
“Shareholders will have seen in the presentation that accompanied our successful capital raising in August, that . . .due to issues we were experiencing with the site in Seadrift, it was possible that the Seadrift facility would not proceed. The update is that the resolution of those issues hasn’t progressed,” Professor Humphreys told the AGM in Sydney.
Attention on rare earths in the US has risen significantly in the past 12 months as the superpower grapples to wrest control of global supplies from major producer China.
Nevada-based MP Materials — in which Lynas shares a substantial shareholder, Australia’s richest person Gina Rinehart — was a huge beneficiary of the push and seems to have taken precedence above Lynas.
The Department of Defence bought $US400 million worth of stock in the company and set a minimum $US110/kg floor price to buy its product.
“MP has got a beter deal out of the US than we have, because they have this one major benefit; they’re American,” Lynas chief executive Amanda Lacaze said on Wednesday.
“We need to recognise and acknowledge that we will never get the same treatment in an America First environment politically, which is what is there at present.”
Ms Lacaze said earlier in the meeting that Lynas was “not relying on the Government to access the US market”. It remains to be seen whether there could still be scope for offtake arrangements with end-use customers stateside.
Amid the geopolitical shift Lynas has recently touted its strong ties with Japan, with which it has several partnerships and hosted a delegation of Government as well as the European Union officials at its rare earths processing plant in Kalgoorlie last month.
The meeting comes the day after Lynas blasted the WA Government over power issues at the Goldfields plant that it claims have put the miner about a month behind on its production schedule.
“We were just ready to really hit our straps and then Western Power gave us the gift of really quite some significant power outages, which has made it quite difficult this quarter,” Ms Lacaze said.
Energy Minister Amber-Jade Sanderson on Tuesday confirmed the Government was working closely with Lynas and other major users to reduce interruptions and improve reliability, and that the supplier would “complete local equipment upgrades in coming weeks, building on key upgrades to the transmission network that feeds the area”.
Shadow Energy Minister Steve Thomas said he was “astounded” that there were “no proper solutions” for power issues in the Goldfields, despite the Government’s eight years in office..
He said any decision about the development of a a proposed new electricity network — the Goldfields Regional Network — “would only pass regulatory and market review phase mid-next year”.
“That means any decision and actual construction of this “possible” but uncommitted plan is years away,” he said.
“We have been through the biggest fiscal boom in our state’s history, with repeated massive Government surpluses, but the Goldfields remains under-planned and under-powered.”
https://thewest.com.au/business/mining/lynas-rare-earths-build-in-lone-star-state-scuppered-as-america-first-policy-prevails-c-20797189
