Article by Brad Thompson, courtesy of Townsville Bulletin.
26.02.2025
Rare earths boss Amanda Lacaze has suggested a Donald Trump-brokered deal with Ukraine might turn out to be little more than pie-in-the-sky when it comes to securing supply of materials essential in the defence, electronics and renewables industries.
The Lynas Rare Earths managing director said on Wednesday that she had heard all sorts of weird and wonderful theories and “thought bubbles” about the sector over the years.
Asked about the prospect of Ukraine becoming a major supplier to the US in line with any Trump deal, she said: “In the time that I’ve been involved in rare earths, I’ve heard about a rare earth race to the moon because there could be lots of mining on the moon to get rare earths.
“I’ve heard about a sort of rare earths race to the sea floor because there’s lots of rare earths on the sea floor, which could be useful in the future. I heard about a rare earths race to Afghanistan at one stage.”
Ms Lacaze insisted the best way for the US to secure rare earths was to buy it from Lynas, the world’s biggest non-China producer, from a mine in WA and processing plant in Malaysia.
Speaking at the White House on Tuesday, Mr Trump said he had reached an agreement with Ukrainian president Volodymyr Zelensky to develop the European nation’s rare earths and critical minerals industry.
Multiple reports suggest Ukraine will tip 50 per cent of the proceeds from the monetisation of its mineral recourses into a jointly owned fund, which would invest in projects in Ukraine.
Ms Lacaze said there were a lot of misconceptions about rare earths and how long it took to bring new projects online to challenge China’s near-stranglehold on supply, particularly in heavy rare earths oxides.
“I remember watching a television show with my husband, and they were talking about accessing lanthanum length and how expensive it was. And I’m like, ‘well, I’ve got 100 tonnes in the warehouse, if you’d like to come and buy some from me’,” she said.
“I think that everybody who assesses this industry would know how long it takes from having the sort of thought bubble of ‘wouldn’t it be great to have some rare earths source from x’, wherever x may be, and actually having some separated product sitting in a big bag waiting for a customer to buy it.
“Our view would be very simple: the best way to get guaranteed supply in the West is to buy product from Lynas because we have it.”
Ms Lacaze was speaking after Lynas assured investors there were green shoots in rare earths pricing after an 85 per cent drop in interim profit to $5.9m, well down on consensus forecasts of $32.2m.
Lynas reported an 8 per cent lift in revenue to $254.3m on the back of higher production. However, earnings before interest, tax, depreciation and amortisation fell 39 per cent to $38.1m as the average China domestic price of neodymium and praseodymium (NdPr) slumped from $US56 per kilogram in December 2023 to $US49/kg in December 2024.
Barrenjoey analysts said foreign exchange translations and inventory accounting were drivers in the big miss on consensus forecasts.
“We interpret this as an accounting miss that doesn’t provide any change to the economic outlook for Lynas,” they said.
Ms Lacaze noted China’s move to tighten its control of supply chains, revealed last week, had already seen NdPr prices increase by about $5/kg, and could benefit Lynas.
Chinese authorities have released draft regulations which foreshadow further centralised control of rare earths processing and consolidation of the industry.
If the draft regulations pass into law, Lynas expects centralised control will rest with two big firms, in Northern Rare Earths and China Rare Earths, which will absorb smaller, independent players.
The US Department of Defence is backing both Lynas and New York-listed MP Materials, the world’s two biggest producers of rare earths outside of China, to build processing plants in Texas.
Lynas and MP Materials previously held merger talks and Australia’s richest person, Gina Rinehart, is a big shareholder in both companies.
Another iron ore billionaire, Andrew Forrest, took control of the Yangibana rare earths and niobium project in WA last week via his private company Wyloo.