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.
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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.
