“Vision becoming reality”: the history of Lynas’s Mount Weld mine

Some 20 miles south, and 75 miles east, of the towns of Laverton and Leonora, the facility that would become the Mount Weld mine was built on the Mount Weld Central Lanthanide deposit. To this day, neighbouring deposits owned by Lynas remain undeveloped, including the Duncan, Crown and Swan deposits, as the central deposit garnered the most attention from the miner.

The deposit holds vast quantities of rare earths, with total reserves estimated at 19.5 million tonnes at a grade of 8.5%, figures, which would yield over 1.6 million tonnes of rare earth oxides. If figures from fellow Australian rare earths miner Arafura are to believed, which estimates that the global demand for rare earths will reach 231,000 tonnes by 2023, the Mount Weld mine could meet this demand eight times over by itself.

Lynas will be hoping that the mine can indeed live up to this potential, considering the vast investment made into the project. The company completed its feasibility study in March 2005, which estimated the total capex cost of beginning production at $680m (A$1bn), a staggering sum made all the more significant by the fact that there was less attention being paid to rare earths across the mining sector in the mid-noughties.

Lynas began production at the mine in 2007, and the company was eager to see work begin. In the miner’s 2007 annual report, chair Nicholas Curtis – who has since moved on to be chair the board of directors at Northern Minerals – noted that, “2006-2007 was the year in which the company’s achievements gave certainty to our vision becoming reality.”

The company announced that initial production was 10,500 tonnes per annum, and that it had plans to double this output in the coming years. While Lynas has reached this goal of 21,000 tonnes per annum, production at the mine did reach a peak of 19,737 tonnes in 2019, before falling slightly, but remaining stable, in the following years, with production totals of 15,761 tonnes in 2021 and 15,970 tonnes in 2022.

This period also saw significant investment in the form of a $304m (A$450m) pledged through an equity raising initiative, drawing the attention of JP Morgan, which began to provide ratings for the company’s investments for the first time. This money was put towards both expanding the mining project itself, and developing a processing facility in Malaysia, to build out the project’s supply chain.

After four years of production, Lynas’s investments in the mine’s supply chain began to pay dividends, as the company was able to use its on-site processing plant for the first time. The Mount Weld processing plant can produce up to 240,000 tonnes per annum of ore, including 26,500 tonnes of rare earths, and the use of a local facility, as opposed to a distant concentrator owned by another company, was an important step for Lynas.

Similarly significant was the production of the Lynas Advanced Materials Plant (LAMP) in Malaysia, another processing facility that would work with the oxides produced at Mount Weld, but one based overseas. The LAMP project boasted annual production capacity of 22,000 tonnes, almost doubling the company’s total production capacity between the Malaysian facility and the Mount Weld processing plant.

Work at the LAMP facility was announced in 2010, and Lynas began shipping ore to the project in late 2012, ahead of the start of production at the plant in 2013. While production was temporarily suspended in 2020 due to the Covid-19 pandemic, Lynas was able to operate the Malaysian facility for a decade, significantly increasing its total production.

The period from 2018 to 2019 was one characterised by optimism and expansion, as Lynas looked to build on encouraging exploration results and expand operations at Mount Weld. In 2018, the company announced a 70% increase in the mine’s mineral resources and a 60% increase in ore reserves, as new discoveries and more efficient mining processes combined to extend the mine’s lifespan by 25 years.

The following year, the miner announced its 2025 growth plan, which included a target to increase production of neodymium praseodymium (NdPr) by 50% to 10,500 tonnes per annum within six years. Not only is NdPr useful on its own – it is a component in the production of welders’ helmets and protective equipment – but the investment in this particular rare earth product came at a time when the price of neodymium was steadily climbing, and Lynas appeared eager to make the mineral one of the cornerstones of its long-term plans.

This plan also included an investment of around $500m (A$740m), another sizable cash injection that helped put Mount Weld on the map. In 2020, the Australian government granted the mine major project status, a designation that grants access to additional “project support and coordination” from the national government, but also has had a significant impact on Lynas’s reputation, as the government has given its approval that its mine is not just productive and profitable, but one worthy of particular recognition and respect within the Australian economy.

After years of consistent and efficient production, even through the turbulence of the Covid-19 pandemic, Lynas began to encounter larger challenges earlier this year. The Malaysian government has banned the company from operating its project in the country from July this year, due to health concerns regarding the radiation produced by the facility’s cracking and leaching activities, a key part of the process of refining rare earths.

While Lynas has not yet announced what it will do with the project – and it is worth noting that the International Atomic Energy Agency found the project to be “low risk and compliant with relevant regulations,” according to Mining.com – the sudden loss of tens of thousands of tonnes of production would be a blow to Lynas, which has done little but expand its operations since 2005.

This year has brought some happier news for the company, notably that Japanese trading house Sojitz and the Japan Organization for Metals and Energy Security will invest around $134.7m (A$200m) into Lynas, as part of a deal to export rare earths to Japan.

With several countries, including Japan, eager to reduce their reliance on Chinese rare earth exports, Lynas is uniquely positioned to grow its base of international customers, which could help secure the long-term future of the company, as uncertainty continues to hang over its work in Malaysia.