Beleaguered Australian rare earths miner Lynas Corp.,
whose controversial LAMP advanced materials refinery
plant continues to face hurdles among the locals in Malaysia,
triggering a $40 million blowout in related construction
costs and yet another start-up delay, has received a much
needed financial boost of $US225 million ($215 million) from
investors Mount Kellett Capital Management.
Mount Kellett Capital Management, a US-based investment firm
set up by former Goldman Sachs bankers, reportedly approached
Lynas Corp. to provide the much needed funds through an
unsecured convertible bond issue, according to Reuters. Mount
Kellett Capital Management, which specialises in snapping up
shares of distressed companies or those in unusual financial
obligations or situations, is expected to immediately infuse
$US50 million into Lynas Corp. The balance, or $US175 million,
will be given once the investment firm completes due diligence,
expected next month.
On Tuesday, Lynas Corp. revealed assuming it wins
the temporary operating licence it has lodged before the
Malaysian Atomic Energy Licensing Board (AELB), plant production
could possibly start only in the second quarter of 2012, five
months later than earlier scheduled. Lynas Corp.'s application
for a temporary operating licence is scheduled for deliberation,
and hopefully approval, by the AELB on Jan. 30.
Lynas Corp. said interruptions in procurement acquisitions,
extra engineering completion requirements and the monsoon
triggered the setbacks for the plant's construction. Forecast
cost for the first phase of its rare earths project had jumped 7
per cent to A$640 million ($672 million), the company added.
"We are delighted Lynas accepted our offer to become a
significant investor and look forward to participating in the
development of the world's first reliable, sustainable supply
chain for rare earth elements outside of China," Mount
Kellett co-founder Jason Maynard said in a statement.
Lynas Corp. plans to process ore from its West Australian
mine at its advanced material plant, already about 85 per cent
complete, in Kuantan, Malaysia.
The Mount Weld Rare Earth Project near Leonora in WA
is one of Lynas Corp.'s asset base. The other is the LAMP plant
in Malaysia. Under Phase 1, combined output from the two projects
is expected to reach 11,000 tonnes of rare earth metals
Mount Weld is already operational, with buyers already
lined-up to purchase its yield. The final stumbling stock that
remains is Malaysia's approval on the LAMP plant. Once approval
is secured, Lynas Corp. is touted to become one of the world's
biggest rare earths producers that could possibly
give China a run for its money and rare earths produce,
a group of 17 elements essential to make high-tech electronics,
magnets and batteries as well as renewable energy products such
as hybrid cars.