Lynas Corporation: One Step Forward, Two Steps Back

After seemingly never-ending delays, Lynas Corporation (ASX:LYC), a company focused on creating a fully integrated source of rare earths from mine to market, is ready to produce its first product samples.

The announcement was made in the company's latest quarterly report, despite that fact that Lynas still has to win one more legal battle concerning its Malaysia-based refining facility.

The report notes that for the three months ended December 31, 2012, its Western Australian operations generated 15,200 dry tonnes of concentrate containing 5,410 tonnes of rare earth oxide (REO). This material is now ready for export.

Firing up operations

At the same time, Lynas announced the successful commissioning of the cracking and leaching extraction units at its Lynas Advanced Materials Plant (LAMP) in Malaysia. The report states that, "[t]he process has achieved recovery rates of more than 90% of contained Rare Earths oxides through the cracking units. The mixed Rare Earths sulphate is now being fed into the solvent extraction units for ultimate production of individual Rare Earths products."

The LAMP facility has been under constant scrutiny as far back as 2007, when the Malaysian government gave Lynas the green light to build in an industrial park near Kuantan. Since then, the firm has come up against constant legal battles and substantial delays, leading some to question whether the company's project would ever get off the ground.

These concerns have now been sidelined: Lynas anticipates initial commercial product samples to be available later in February, and the ramp up to nominal Phase 1 capacity is expected over the coming months.

Legal battlefield

Lynas has shown confidence leading up to its final legal battle, which will involve a judicial review of its operating license. However, as with so many things related to this project, the process now seems far from simple.

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