Malaysia to Challenge Lynas' Dominance with Chinese-Backed Rare Earths Refinery
Malaysia is in discussions with a Chinese state-owned company to build a rival rare earths refinery, aiming to challenge Lynas Rare Earths' dominance. The proposed facility would process both light and heavy rare earths, marking a significant move in the realignment of power dynamics within the industry.
Lynas, which operates the sole rare earths processing plant outside China, saw its stock surge by 21% in September, buoyed by rising rare earth prices. However, analysts have maintained a majority 'Hold' rating due to volatile commodity prices and substantial capital costs. The company is pursuing its 'Towards 2030' growth strategy, backed by a A$750 million capital raise in August.
China, aiming to secure access to Malaysia's untapped rare earth reserves, is driving the negotiations. The Chinese state-owned enterprise involved is partnering with Malaysia’s sovereign wealth fund, Khazanah Nasional, although the specific name of the Chinese company remains undisclosed. Malaysia seeks to develop its own rare earths industry and move up the value chain, challenging Lynas' influence.
Lynas shareholders are expected to demand strategic clarity at the annual meeting on November 26, as the company faces increased competition. Meanwhile, Malaysia's efforts to establish a rival refinery could reshape the global rare earths landscape, marking a significant shift in the industry's power dynamics.
