Lynas, Siemens Form Rare Earths Joint Venture Pact
(Corrects first paragraph to show that Lynas is supplying rare earths to the joint venture in story moved on July 7.)
Lynas Corp., an Australian rare earths developer, and Siemens AG (SIE) have signed a pact that will see Lynas supply minerals used in magnets to Europe’s largest engineering company under a joint venture agreement.
Lynas, which last week agreed to meet additional safety requirements at its upcoming Malaysian refinery, will own 45 percent of the venture, the Sydney-based company said in a statement. Siemens will hold the remaining stake.
“This fits the strategy of Lynas, which is really designed to encourage continued stable and safe growth of these rare earths for new technologies,” Lynas Chief Executive Officer Nicholas Curtis said in a phone interview. “We’re not necessarily thinking short-term offtake contracts, we’re more thinking strategic relationship with a key end user to give them the security they need for their supply chain.”
Prices of rare earths, 17 chemically similar elements used in lasers, plasma televisions and hybrid cars, have more than doubled since the first quarter. China, which controls more than 90 percent of the global market, has restricted rare-earth mining and cut exports to conserve resources and protect the environment.
The refinery, which would be the world’s largest for rare earths, may be commissioned by the end of this year and start production by the second half of 2012, Lynas said. The project will miss an earlier September start date, following recommendations to the Malaysian government by the International Atomic Energy Agency.
Vote of Confidence
The venture with Siemens was a “vote of confidence,” Curtis said. Local residents in Malaysia’s eastern Pahang state and non-governmental organizations have lobbied to stop Lynas from operating the plant because of radiation fears.
“This planned joint venture would be an important strategic pillar for us to pursue a long-term and stable supply with high performance magnets,” Ralf-Michael Franke, chief executive officer of the Siemens Drive Technologies Division, said in the statement.
Lynas fell 3.2 percent to A$1.84 at the 4:10 p.m. close of Sydney trading. The stock has fallen 11 percent since the start of the year.
To contact the reporter on this story: Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net
To contact the editor responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net
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