Lynas shares slide amid construction challenges

Lynas is having a few issues with the commissioning of its Kalgoorlie Rare Earths Processing Facility.

| More on:
A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Lynas Rare Earths Ltd (ASX: LYC) shares are having a poor start to the week.

In morning trade, the rare earths producer's shares are down 1.5% to $7.24.

Why are Lynas shares falling?

Lynas shares have come under pressure on Monday after the company released an update on the commissioning and operation of the new Kalgoorlie Rare Earths Processing Facility.

According to the release, commissioning is being undertaken in four phases, with the final stage commissioning commenced in June.

Under stage one to three commissioning, key production equipment is prepared, tested and certified as ready for production. Whereas stage four commissioning involves the introduction of reagents and feedstock. This includes the first feed of lanthanide concentrate to the kiln and completing the heat-up process cycle for the kiln.

In June, chemical and wet circuits, including neutralisation, filtration and carbonation circuits, will be fed with rare earth carbonate from Lynas Malaysia, which will allow the completion of stage four commissioning of those circuits.

However, there have been a couple of hiccups with this final stage. The release reveals that while stage four process commissioning is largely on track for completion by the end of the month, two critical path items are holding things up. These are the waste gas treatment plant and on-site gas supply.

In light of this, the first production of Mixed Rare Earth Carbonate (MREC) from the Kalgoorlie Facility is now expected in August.

Though, investors may have a few concerns that even this timeline could prove optimistic. That's because the company highlights that further challenges have been presented with respect to the completion of these two items. This includes the lack of availability of suitably qualified people to fully staff 24-hour construction activities as well as the late delivery of equipment required for the finalisation of commissioning.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

Why are South32 shares sinking 5% today?

Let's see what is weighing heavily on this mining giant's shares today.

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Materials Shares

How much upside does Macquarie forecast for Pilbara Minerals shares?

Is the broker bullish or bearish on this lithium giant? Let's find out.

Read more »

Group of miners working at a coal mine with one smiling and holding up a piece of coal.
Materials Shares

How much upside does Macquarie project for South32 shares?

Is this miner's luck about to change?

Read more »

A group of miners in hard hats sitting in a mine chatting on a break as ASX coal shares perform well today
Materials Shares

Down but not out: Can these ASX mining shares bounce back?

Here’s what one broker is predicting for Australia’s largest mining companies. 

Read more »

Broker analysing the share price.
Materials Shares

Buy, hold, or sell? Broker's verdict on 3 ASX 200 materials shares

Materials was one of four market sectors that weakened in overall value in FY25.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Why is this ASX mining stock crashing 14% today?

Let's see what is causing investors to hit the sell button on Monday.

Read more »

Three miners stand together at a mine site studying documents with equipment in the background
Materials Shares

$10,000 invested in BHP shares in FY25 is now worth

Did the Big Australian outperform or underperform during the last financial year?

Read more »

A male investor sits at his desk pondering at his laptop screen with a piece of paper in his hand.
Share Market News

Why did Macquarie just downgrade Liontown resources shares?

Here’s what the broker had to say about this materials company. 

Read more »