Lynas updated the project budget based on the continued finalisation of construction costs and the extended commissioning timeline and plans to cover it from the existing cash balance and estimated A$600m capital expenditure package for FY24
Lynas Kalgoorlie rare-earths processing facility. (Credit: Lynas Rare Earths)
Australia-based rare-earths miner Lynas has increased the capital cost estimate of its Kalgoorlie processing facility by A$70m ($45m), which brings the total costs to A$800m ($520).
Lynas increased the cost estimate from the August 2023 budget of A$730m, which is A$300m more than the original budget of A$500m.
The company updated the project budget based on the continued finalisation of construction costs and the extended commissioning timeline.
It intends to cover the increased expenditure from the existing cash balance and accommodate within the estimated A$600m capital expenditure envelope for FY24.
Lynas CEO Amanda Lacaze, in the quarterly update, said: “The commissioning and initial production activities were ongoing, following the first feed of material from Mt Weld in December.
“The introduction of concentrate into the process informed additional works and activities.
“This included enhanced electrical back-up systems following a major electricity outage in January, further testing of loading and unloading systems and additional testing of the flowsheet.
Lynas initially fed the material from Mt Weld into the Kalgoorlie facility in December 2023 and carried out final commissioning and initial production activities throughout the quarter.
According to the company, the introduction of concentrate into the process resulted in additional work.
The additional work includes enhanced electrical backup systems, further testing of loading and unloading systems and additional testing of the flow sheet.
The costs related to the commissioning will be capitalised as per the accounting standards until the facility achieves commercial production, said the Australian miner.
Construction works at Lynas’ Mt Weld Expansion Project are progressing as per the schedule, with structural, mechanical, piping (SMP) and electrical works at an advanced stage.
Last month, the company announced that Western Australian company Carey Group has been awarded a 5-year contract for mining services at its Mt Weld rare-earths mine.
Furthermore, Lynas secured the detailed engineering, procurement, and approvals activities for its US Rare Earths Processing Facility during the quarter.