Another episode in the soap opera that is the immediate future of Lynas Corporation, its Malaysian rare earths processing plant and possibly the company’s independence.
Lynas told investors it would not have been vulnerable to the “highly opportunistic conditional proposal” that was the unwanted $1.5 billion bid from Wesfarmers, if it was not for challenges it faces in Malaysia.
“We would also like to acknowledge the feedback received from many shareholders that they are surprised and disappointed with the reported conduct of Wesfarmers, in particular, their decision to engage with the Malaysian government at a time of sensitive and complex regulatory negotiations,” Lynas said in the letter signed by chief executive Amanda Lacaze and chairman Mike Harding on Wednesday.
That was the 5th statement from the company about the now spurned bid since Monday of this week, the Malaysian government and the processing plant in that country, as well as an idea of future changes to the company future structures.
Lynas has been forced to reveal plans for expansion in Western Australia that is now likely to include cracking and leaching operations which will remove the radioactive elements before shipping it to Malaysia.
“Our objective in developing these plans is to add to, not replace, our current operations. We believe this is still an achievable path,” the letter to investors said.
The Western Australian government indicated this week that it is open to rare earth miner Lynas Corp’s plans for a processing plant in the state to satisfy onerous new licence conditions imposed by Malaysian Prime Minister Mahathir Mohamed.
WA Mines and Petroleum Minister Bill Johnston on Tuesday said the government “supported job-creating proposals”.
Lynas has not yet spoken to the government.
The soap opera erupted last Friday when Malaysian Prime Minister Mahathir Mohamad indicated that Lynas or any suitor (Wesfarmers was the only one) would now have to extract radioactive residue from its ore before it is shipped to Malaysia for processing.
Wesfarmers executives, including chief executive Rob Scott met the Malaysian leader, leading to accusations that the company had engaged in “dirty tricks” (to quote a headline in Tuesday’s Financial Review) so far as Lynas was concerned. Wesfarmers then rejected any inference that its actions were inappropriate.
“At this time, no decisions have been made on the final growth plans, however, we look forward to sharing our plans with you in the coming weeks,” the letter continued.
“We are confident of our ability to deliver the increase in capacity required to grow with the market, and to do this faster, cheaper and with less risk than any other company. In doing so, we can present you with a compelling case for supporting the company in its current form.”
Lynas shares fell 0.9% on Wednesday or 2 cents to $2.11 the closing price the shares ended last Friday.
