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- Lynas Rare Earths’ (LYC) processing plant in Malaysia has been hit with water supply disruptions
- The company reported softer production back in the June quarter because of water supply issues but at the time said it expected this would be resolved in August
- Unfortunately, a major equipment failure meant steady water supply from local supplier PAIP couldn’t resume as planned on September 10
- Lynas has been informed by PAIP that it won’t be supplied with any water for at least the next week
- LYC shares are up a slight 0.06 per cent to $8.83 at 3:34 pm AEST
Lynas Rare Earths (LYC) today reported water supply issues had continued to disrupt operations at its rare earths processing plant in Kuantan, Malaysia.
The company said a “catastrophic” equipment failure earlier this month meant local Malaysian water supplier PAIP would not supply any water to the company for seven days.
This issue is reportedly affecting all users in the Kuantan area, including residential customers.
It comes after Lynas in the June quarter reported a decrease in rare earth oxide (REO) production from its Malaysian plant due to water supply issues, which were expected to be resolved in August.
Nevertheless, the company said PAIP’s water supply remained unpredictable over July and August, and on most days, supply was below the level required to run all four kilns.
To mitigate the impacts of the supply issues, the rare earths producer sought water from alternative local sources and trucked water to the site, leading to it achieving over 800 tonnes of ready-for-sale neodymium and praseodymium for the months of July and August combined.
PAIP initially advised the issue would be fixed and normal supply would resume from September 10 but has now informed Lynas that it won’t be able to supply any water for at least the next week.
While Lynas and other affected users have provided equipment and personnel to help PAIP make the required repairs, the company said it expected supply to be unpredictable for the rest of September.
LYC shares were up a slight 0.06 per cent to $8.83 at 3:34 pm AEST.
