Lynas granted $11m from Australia for rare earth refining process

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Australia's Lynas Rare Earths has been awarded an AU$14.8 million (€9.4 million) by the Australian government for the commercialisation of a new rare earth mineral refining process that will produce high-purity carbonate.

The news comes as many nations are looking to reduce their reliance on China for rare earth minerals, used for a variety of products such as smartphones, electric vehicles, wind turbines and military hardware.

Lynas is the world's second-largest producer of rare earths and the only significant producer outside of China, which holds a near-monopoly in the sector with the Australian company producing around 13% of the global supply.

Read more: Saltend Chemicals Park selected for rare earth processing facility

The new refining process will be used at its AU$500 million (€310.1 million) facility in Kalgoorlie, Western Australia, construction of which is set to begin soon.

The grant was made as part of the Australian government's Modern Manufacturing Initiative and will meet around half of the costs of implementing the new process at Kalgoorlie.

Canberra says the initiative gives support and provides co-funding for projects to encourage connections with local businesses as well as domestic and international companies.

Lynas said it could transport the rare-earth carbonate produced in Kalgoorlie to its facility in Malaysia and its proposed plant in Texas for processing.

Shares of the company rose as much as 8.2% in their biggest intraday jump in five months.

Lynas has been subject to controversy in Malaysia, where it processes the minerals mined in Australia at a facility in Kuantan, which lies on the east coast of the Malay Peninsula, around 250 km (155 miles) east of the capital, Kuala Lumpur.

In 2019, the company was at the centre of a divisive row over 580,000 tonnes of low-level radioactive waste being stored at the Kuantan facility which ultimately played a part in bringing down the ruling coalition that had governed Malaysia for the previous 61 years.

Read more: China put in spotlight as West debates challenge of rare earths in Brussels

The waste is a byproduct of the enrichment process and activists in Malaysia were concerned about the threat it could pose to local communities and the environment.

Lynas workers also held counter-demonstrations, highlighting the importance of the company as an employer in the Kuantan region.

The International Atomic Energy Agency described the risk of radiation to the public as being "intrinsically low" and the then Prime Minister, Mahathir Mohamad, dismissed criticism of Lynas' operations in Malaysia.

"It's not Chernobyl. This isn't going to be dangerous," he said after his ruling coalition extended the plant's operating licence.

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